Russia - WikiLeaks
Russia 091102
Basic Political Developments
• Reuters: PRESS DIGEST - Russia - Nov 2
• Reuters: Miliband calls for Iran's answer on fuel offer
o Nasdaq: UK's Miliband: Talks Added Depth To Relationship With Russia
o Kyivpost: British Foreign Secretary: Ukraine, Georgia's NATO integration is no threat to Russia
o Itar-Tass: Moscow hopes for further political contacts with London
o AP: Miliband hopes for better British-Russian ties
o RIA: Lavrov, Miliband hope for better Russian-British ties
o AFP: Russian envoy says Miliband visit chance to 'reset' ties
o The Moscow Times: Miliband Flies In for ‘Frank’ Talks
o Russia Today: Miliband visit raises hopes for Russia-UK “reset”
o BBC: Miliband begins visit to Russia
o Telegraph.co.uk: David Miliband makes first visit to Russia by Foreign Secretary in five years
o Sky News: Miliband Makes Trip To Moscow To Mend Ties
o Guardian.co.uk: Russia is set to turn a page
o Times Online: Miliband arrives on poignant anniversary but pragmatism rules now
o Times Online: Miliband expecting little progress from frosty Moscow trip
o Times Online: No Break in the Ice - Russia remains an obdurate enigma and not an ally in international diplomacy
o The Independent: Miliband in key visit to Russia
o FINANCIAL TIMES: To Russia with dove
• RIA: Russia, U.S. to continue nuclear arms talks on November 9
• : Russia does not see dollar debate at fin min G20
• Civil.ge: Georgia Denies Talks with Russia over Reopening Border
• B92: Latvia to stage "retaliatory" military exercises
• The Washington Times: Diplomatic traffic
• The Moscow Times: Russia Snubs UN Arms Trade Treaty
• The Moscow Times: Putin, Tymoshenko Stoke Gas Fears
• Reuters: UPDATE 2-Putin warns EU of possible gas disruption – agency
• Upstreamonline: Ukraine vote revives gas dispute risks
• The News: France, Russia in arms deal [pic][pic][pic]
• Itar-Tass: Khasavyurt warlord destroyed in Dagestan
• RIA: Three militants killed in Russia's Dagestan
• RIA: Imam of village mosque killed in Dagestan
• Interfax: Imam of village mosque shot dead in Dagestan
• RIA: Grenades fired at Russian Interior Ministry building in Nazran
• Russia Today: US diplomat spotted at illegal rally in Moscow – report
• RFERL: Russian Police Detain 50 At Human Rights Protest
• Financial Mirror: Russian FM to visit Cyprus
• OfficialWire: Russia Test-Fires Ballistic Missile
• Strategy Page: Trashing The MiG-29
• RIA: Russian rocket puts 2 European satellites into orbit
• The Straits Times: Russia launches satellites
• RIA: Russia to start swine flu vaccine tests on children on Monday
• RIA: Number of swine flu cases in Russia's Kamchatka rises to 54
• Leagle: Russian Supreme Court Believes No Death Sentences Can Be Passed Next Year
• The Moscow Times: National Census Back On for 2010
• Russia Blog: Putin: Census 2010 Is a Go
• The crisis has left without work for more than 750 thousand Russians
• RIA: Moscow News to relaunch Arabic version
• Times Online: Moscow’s iron mayor, Yuri Luzhkov, loses grip
National Economic Trends
• Reuters: Russia c.bank injects 18.8 bln roubles via repos
• RIA: Russia's inflation to stay under 10% in 2009 - Central Bank
• Bloomberg: Russia Manufacturing Slips Into Contraction as Recovery Stalls
• RBC: Real economy not to benefit from rate cut, experts say
• Reuters: Russia should dissuade banks getting big - cbanker
• Russia Today: Mooted Russian gold sales in support of local companies and budget
Business, Energy or Environmental regulations or discussions
• Reuters: Russian banks' loan portfolios shrink in Sept
• WSJ: Avtovaz Bumps Up Against Kremlin - Barred From Layoffs, Car Maker Slashes Pay and Urges Retirements
• RBC: Federal Grid company posts drop in Q3 net profit
• Steel Guru: Russian railways could increase 2009 budget
• RBC: Russian Railways looks to boost investment program by 10%
• Steel Guru: Rusal hit by USD 6 billion losses
• Reuters: UPDATE 1-RUSAL in 1.68 mln t China aluminium supply deal
• Market Watch: Rusal signs supply contract with Chinese firm
• Bloomberg: Rusal Offers to Invest in Power Plant Upgrade, Vedomosti Says
• Alfa: Deripaska proposes that Rusal should finance the modernization of RusHydro's Mainskaya GES
• WSJ: Alfa Wants to Realign Assets - After Pact With Telenor, Altimo Unit Floats Idea to Merge Other Stakes
• Reuters: Alfa wants to consolidate MegaFon, Turkcell –paper
• The Independent: Barclays and HSBC march on Moscow
• eWeek Europe: Russia Waits On EC For Sun Oracle Deal Approval
• Barentsobserver: Reinertsen to expand in Murmansk
• Trading Markets: ArcelorMittal to continue mining coal in Siberia
Activity in the Oil and Gas sector (including regulatory)
• Upstreamonline: Russia sees boost in output
• Reuters: Putin warns EU of possible gas disruption
• PR Newswire: Platts to Launch Russian Pricing Reference for New Asia-Bound Oil Starting Mid-December
• Asia Times Online: Sechin divides the Black Sea - Russia's Deputy Prime Minister and energy tsar, Igor Sechin, is attempting to divide the Black Sea with a stroke almost as dramatic as the biblical one with which Moses surprised the Pharaoh at the Red Sea.
Gazprom
• Citibank: Shtokman project to be delayed until 2013?
• Reuters: Gazprom's Oct gas output rises 21 pct from Sept
• New Europe: Gazprom and Naftogaz: Yet another gas war?
• The Globe and Mail: ENERGY / GAZPROM'S MAN IN HOUSTON
• Dutch News: Gazprom interested in buying Alkmaar's AZ
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Full Text Articles
Basic Political Developments
Reuters: PRESS DIGEST - Russia - Nov 2
Mon Nov 2, 2009 2:48am EST
MOSCOW, Nov 2 (Reuters) - The following are some of the leading stories in Russia's newspapers on Monday. Reuters has not verified these stories and does not vouch for their accuracy.
KOMMERSANT
kommersant.ru
- Russia's mortgage agency has decided to restructure for the second time mortgagae loans debts to help borrowers live through the crisis.
- Russia's Alfa Group wants to consolidate its stakes in the country's third-largest wireless operator MegaFon and Turkey's Turkcell (TCELL.IS: Quote, Profile, Research, Stock Buzz)," Alexei Reznikovich, Chief Executive of Alfa's telecoms arm Altimo, says in an interview.
VEDOMOSTI
vedomosti.ru
- The rate of popularity of the Medvedev-Putin tandem fell in October, the daily quotes the data obtained by Russia's two leading public opinion polls conducted last week.
- Russian billionaire Oleg Deripaska is ready to invest in the reconstruction of one of the hydro-power stations controlled by state-owned RusHydro in exchange for cheap energy.
ROSSIISKAYA GAZETA
rg.ru
- Fishermen in Russia's Far East are facing problems with delivering their record high catch of salmon this year to consumers in the European part of the country, the daily reports.
- Russia's Constitutional Court is to decide on Monday on the fate of the moratorium on death penalty which expires next year.
IZVESTIA
ivestia.ru
- Russian Prime Minister Vladimir Putin has warned the EU of possible problems with gas shipments to European consumers because of Ukraine's energy payment problems, the daily reports.
- The government will allocate 26 billion roubles to support four commercial companies, including the united grain company which is due to buy out grain at fixed prices from local farmers.
NEZAVISIMAYA GAZETA
ng.ru
- Russian President Dmitry Medvedev has warned against attempts to rehabilitate those responsible for extermination of their own people in Stalinist purges, under the pretext of restoration of historical truth, the daily reported.
- Russian and British foreign ministers are unlikely to succeeed in overcoming main problems poisoning bilateral ties, the daily reports ahead of British Foreign Secretary David Milliband's visit to Moscow that starts on Monday.
Reuters: Miliband calls for Iran's answer on fuel offer
Mon Nov 2, 2009 9:33am GMT
MOSCOW (Reuters) - Foreign Secretary David Miliband said on Monday that Iran should make a prompt response to a proposal by the International Atomic Energy Agency (IAEA) to send uranium abroad for further processing.
"We both want to see a prompt response from the Iranian regime in respect of the Tehran research reactor proposal," Miliband told reporters after talks with Russian Foreign Minister Sergei Lavrov in Moscow.
Under the U.S.-backed plan, Iran would send most of its low-enriched uranium (LEU) abroad for further processing to turn it into more refined fuel for a Tehran research reactor.
(Reporting by Conor Sweeney, writing by Guy Faulconbridge, editing by Dmitry Solovyvov)
Nasdaq: UK's Miliband: Talks Added Depth To Relationship With Russia
LONDON -(Dow Jones)- U.K. Foreign Secretary David Miliband said Monday that talks in Moscow with his Russian counterpart Sergei Lavrov have added depth to the relationship between the two countries.
Miliband, who is the first U.K. foreign secretary to visit Russia for five years, said: "We don't hide our differences...we will not allow our differences to block co-operation."
The talks covered the murder of Alexander Litvinenko, a former spy and prominent critic of the Kremlin who was fatally poisoned in London in 2006, and Iran's nuclear program.
Miliband said the U.K. continues to seek justice over the Litvinenko murder and the two men called on Iran to respond promptly to the International Atomic Energy Agency's proposals.
-London bureau, Dow Jones Newswires; +44 (0)20 78 42 9330; generaldesklondon@
Kyivpost: British Foreign Secretary: Ukraine, Georgia's NATO integration is no threat to Russia
Today at 11:37 | Interfax-Ukraine
British Foreign Secretary David Miliband has said he sees no threat to Russia in NATO's decision to help Georgia and Ukraine gain membership of the alliance, and called for the strengthening of relations between Russia and NATO.
"The doors of NATO are open to countries that demonstrate and share the basic values of the alliance. The foreign ministers of NATO countries in December agreed on a number of steps to help Georgia and Ukraine in conducting the reforms necessary to progress towards NATO membership. This is the fulfillment of national programs on promoting reform. NATO is currently working with both candidates so that they move forward. I do not see any threat to Russia. I'd like NATO and Russia to strengthen their contacts," he said in an interview with the Russkiy Newsweek magazine, which will be published on Monday, November 2.
"Our position regarding [last year's] conflict is as before: Georgia made a mistake. But Russia's response was disproportionate. The use of force by Russia expanded the geographic scope of the conflict and the scale of the fighting. Russia violated Georgia's sovereignty and its territorial integrity, and this seems to us unjustified," Miliband said.
He also said that Britain does not support Russia's decision to recognize the independence of South Ossetia and Abkhazia.
Itar-Tass: Moscow hopes for further political contacts with London
02.11.2009, 11.52
MOSCOW, November 2 (Itar-Tass) - Moscow hopes for further political contacts with London that would help to promote all areas of cooperation and create conditions for resolving the remaining problems, Russian Foreign Minister Sergei Lavrov said at the talks with British Foreign Secretary David Miliband on Monday.
“Today we will have a good opportunity to maintain our dialogue that we began on Sunday. Recently our dialogue actively develops despite certain issues in our relations that remain unresolved. We are glad that an economic component of our relations strengthens and has trends to further growth,” he said.
“Cultural contacts develop well. We closely cooperate with Britain in a wide range of international key problems, where united efforts of all countries that in one way or other may contribute to their resolution, are really needed,” Lavrov said.
Miliband expressed the hope that this meeting would provide an opportunity for deepening and developing Russian-British relations.
AP: Miliband hopes for better British-Russian ties
By NATALIYA VASILYEVA (AP) – 5 minutes ago
MOSCOW — Britain's Foreign Secretary David Miliband and his Russian counterpart talked Monday about ways to improve their nations' frosty ties.
Miliband, the first British foreign secretary to visit Russia in five years, voiced hope that his mission will help overcome the strain. "This is a chance to add depth and drive to our relations," said Miliband who arrived Sunday on a two-day visit.
He told his Russian counterpart Sergey Lavrov that Russia and Britain must work together on common challenges.
"There is a great number of questions between our countries where we can find a mutual ground of shared actions," he said as the two sat down for talks.
Russian-British relations fell to a post-Cold War low over the 2006 death of Alexander Litvinenko, a former Russian security officer and British citizen who was poisoned by radioactive polonium in London.
Russia has refused to hand over the main suspect, Andrei Lugovoi, a former security officer turned millionaire businessman, saying the constitution forbids the extradition of its citizens. Lugovoi is now a member of Russia's Kremlin-controlled parliament.
Speaking in an interview with the Russian edition of Newsweek magazine which was published in its latest issue, Miliband voiced regret about the Russian refusal to extradite Lugovoi and said that British authorities would welcome any "constructive proposals" by Russia that would help punish the culprits.
Litvinenko's widow, Marina, was angered by Miliband's decision to visit Moscow on the third anniversary of her husband's poisoning.
Miliband was also expected to seek an agreement allowing the reopening of British Council offices in Russia, which had fallen victim to the diplomatic feuding. Russia accused the British Council, the cultural arm of the government, of acting illegally and ordered its offices closed in 2007.
Miliband said in the Newsweek interview that the British Council was playing an important cultural role and had no relation to politics. He said Britain would reject any attempts to link its activities to any other issues on the bilateral agenda.
RIA: Lavrov, Miliband hope for better Russian-British ties
11:2702/11/2009
MOSCOW, November 2 (RIA Novosti) - The foreign ministers of Russia and Britain said on Monday they hope their talks will help improve ties between the two countries marred by a series of disputes.
Opening talks with Foreign Secretary David Miliband in Moscow, Sergei Lavrov said: "We hope our political contacts today and yesterday will ...create conditions for settling current disputes."
Miliband is Britain's first top diplomat to visit Russia in five years.
Miliband said he hopes their talks will help add "depth and drive" to Russian-British ties.
British-Russian relations have been consistently frosty since the diplomatic fallout following the death of Russian security defector Alexander Litvinenko in London three years ago. Russia refused to extradite a key suspect in the murder, leading to tit-for-tat expulsions of diplomats.
Other disputes have included Russian authorities' pressure on the British Council, Britain's refusal to extradite fugitive Russian businessmen, and Britain's criticism over Russia's conflict with Georgia in August 2008.
AFP: Russian envoy says Miliband visit chance to 'reset' ties
(AFP) – 4 hours ago
LONDON — David Miliband's visit to Moscow, the first by a British foreign secretary in five years, was a chance to "reset" ties, Russia's ambassador to London said Monday.
"We all know that relations between our two countries, at least at government level, have not been easy over the last couple of years," ambassador Yuri Fedotov wrote in the London-based Guardian newspaper.
"The visit is a chance to reset our relationship," he said.
Miliband will be seeking during his two-day visit to mend relations damaged by the poisoning in London of a Kremlin critic.
Shortly after arriving on Sunday, Miliband met with his Russian counterpart Sergei Lavrov for a first round of talks, with more to follow Monday, the British embassy in Moscow said.
Miliband's trip coincides with the third anniversary of the poisoning of former spy Alexander Litvinenko in 2006, but Russia refuses to extradite the KGB agent-turned-lawmaker who is the chief suspect in the murder.
A row over the status of the British Council and disputes over the ownership of Russian-British oil giant TNK-BP have added to mutual distrust over the Litvinenko case, resulting in an unprecedented degradation in ties.
Fedotov said the easing of strict visa norms implemented after the Litvinenko case would be welcomed.
"Unfortunately, the UK government has allowed political differences to spill over into the granting of visas, making it harder to encourage cultural and business exchanges," he said.
"Restoration of the close cooperation that was building on terrorism policy until two years ago would also be strongly in both countries' interests."
He concluded: "We hope the foreign secretary's visit shows we can turn a page in relations based on mutual interest and respect."
The Moscow Times: Miliband Flies In for ‘Frank’ Talks
02 November 2009
By Nabi Abdullaev
British Foreign Secretary David Miliband arrived in Moscow on Sunday for “a frank discussion” with Foreign Minister Sergei Lavrov that will cover contentious issues like Russia’s refusal to extradite a murder suspect and the British Council as well as pressing international problems like Iran and Afghanistan, a British diplomat said.
The visit, the first after five years of intense diplomatic disputes between the two countries, follows Lavrov’s declaration last month that Russia was ready to “reset” relations with Britain, just as it did with the United States earlier this year.
But foreign policy analysts played down hopes of a rapid thaw in relations, given the number of sore points between the two sides.
A Foreign Office diplomat told The Moscow Times that Miliband and Lavrov would discuss a wide range of topics during the two-day visit, including Iran, Afghanistan, nuclear nonproliferation, global finance, energy cooperation and business relations between Britain and Russia.
Asked whether Miliband would bring up disputed issues, the diplomat confirmed that the talks would also cover Britain’s efforts to extradite State Duma Deputy Andrei Lugovoi to face charges in the poisoning death of former security service officer Alexander Litvinenko, the Foreign Ministry’s decision to close all but one branch of the British Council, the fate of jailed oil tycoon Mikhail Khodorkovsky and Moscow’s complaints that Russians such as businessman Boris Berezovsky and former Chechen rebel envoy Akhmed Zakayev are evading Russian justice in Britain.
“We will have a frank discussion between our countries,” the diplomat said, speaking on customary condition of anonymity.
Miliband told Russian Newsweek in an interview to be published Monday that he hoped to make headway in Litvinenko’s 2006 death.
“Mr. Lugovoi, of course, may be a Duma deputy, but he is still wanted,” Miliband was quoted as saying. “Therefore, we are open to any constructive suggestions from the Russian government. We hope that they will help the British court to punish the perpetrators of this horrendous murder in Britain.”
After Moscow refused to extradite Lugovoi in 2007, Miliband ordered the expulsion of four Russian diplomats and tightened visa procedures for Russian officials. Russia replied by expelling four British diplomats.
In the Newsweek interview, Miliband defended the British Council, the cultural arm of the British Embassy, as an organization that “benefits hundreds of thousands of Russians every year.” As examples, he mentioned a British film festival that took place in Moscow over the weekend and an exhibition by British artist William Turner last November that attracted 200,000 people.
“The British Council is a cultural, not a political, organization, and we strongly reject any attempt to link it with other issues in our bilateral relations,” he said.
A spokeswoman for the council’s Moscow office declined to comment for this article, saying only that the council was not considering reopening its other branch offices in Russia.
A dispute over the British Council’s legal status in Russia led to the closure of its offices in Yekaterinburg and St. Petersburg in January 2008. Lavrov, however, has linked the closures to strained diplomatic ties.
Lavrov, who reportedly used an expletive while scolding Miliband in a phone conversation after last year’s war in Georgia, said on Oct. 16 that the time was ripe to reset relations.
“On our side, everything is ready for the reset,” he said in an interview with RT state television.
“We haven’t frozen the work on easing the visa regime with Britain or cooperation between the special services, and we haven’t shut any channels of cooperation,” he said.
But in a sign that friction remains, Foreign Ministry spokesman Andrei Nesterenko also complained last month that Britain was stalling negotiations to ease visa rules for Russians.
A total of 6.8 percent of Russian applicants — more than 10,000 people — were denied British visas in the 2008-09 financial year, compared with 3.3 percent in 2002-03, Greg Hands, a Conservative member of the British Parliament, told a Oct. 14 parliamentary hearing.
Russia’s ambassador to London, Yury Fedotov, said on the eve of the talks that a radical improvement in relations would only be possible after Britain lifted “anti-Russian measures” imposed in 2007, Interfax reported.
Miliband is one of the most vocal critics of Russia among senior Western Europe officials.
Miliband, an outspoken supporter of Georgia’s territorial integrity, last week accused Moscow of neglecting its obligations under a peace pact brokered by the European Union to end the August 2008 war with Georgia.
Also last week, speaking at the London-based International Institute for Strategic Studies, Miliband stressed the importance of the Eastern Partnership, an EU project aimed at engaging former Soviet republics to achieve stability there. Moscow views Eastern Partnership as an intrusion into what it considers its zone of influence.
Spin doctor Gleb Pavlovsky, as an adviser to then-President Vladimir Putin, once accused Miliband of “anti-Russian racism” and said he inherited his hatred for Russia from his Polish grandfather.
Belligerent rhetoric against Britain, once fashionable among Russian officials, has abated after the “reset” of relations with the United States, a top British ally that London is assisting in military operations in Iraq and Afghanistan.
No diplomatic breakthrough should be expected from Monday’s meeting, said Mark Entin, head of the Institute of European Law at the Moscow State Institute of International Relations.
“At the meeting, Lavrov and Miliband will instead try to understand whether both sides match each other’s expectations,” he said.
Still, the meeting will be important as a possible turning point in relations, especially if the pair focuses on common interests like Iran and Afghanistan rather than differences, said Vladislav Belov, an analyst with the Institute of Europe at the Russian Academy of Sciences.
The Foreign Office diplomat said Miliband would also meet with representatives of civil society, nongovernmental organizations and business during his visit to Moscow, the first by a British foreign secretary since 2004.
Russia Today: Miliband visit raises hopes for Russia-UK “reset”
02 November, 2009, 10:49
British Foreign Minister David Miliband has arrived in Moscow hoping to warm up the frosty relations between the UK and Russia.
It is expected that the talks between the two FMs are going to be focused on the issues of the Middle East, Iran and Afghanistan. David Miliband will also be meeting with politicians, business leaders and civil servants.
First it was US President Barack Obama meeting President Medvedev, then the new Secretary General of NATO made relations with Russia a top priority. Now it’s appears to be the UK’s turn to renew its relationship with Russia, with Miliband making the first visit to Moscow by a British Foreign Minister in five years.
“Relations between Britain and Russia – the work that we need to do together – cover the whole globe, including issues like climate change,” Miliband said. “We’ll obviously make sure that we try to address the full range of our interests and concerns together.”
Relations between the UK and Russia have been fraught with difficulty over the last few years.
Ties began to deteriorate with the UK’s granting of political asylum to Russian tycoon Boris Berezovsky and Chechen Akhmed Zakayev in 2003. Both are wanted men in Russia, and Britain has refused requests to extradite them.
In 2006 came a story straight out of a spy novel. The FSB accused Britain of using a fake rock planted in a Moscow street as a dead drop for secret information. Tit-for-tat diplomatic expulsions followed.
A post-Cold War low came later that year, following the polonium-210 poisoning of ex-Russian security officer Aleksandr Litvinenko in London. Britain’s main suspect is Andrey Lugovoy, whom Russia, in turn, refuses to extradite to the UK.
Two years ago Russia suspended the work of the British Council. It accused the cultural NGO of breaking tax laws, and raided and shut down offices. The Council was later cleared by a Russian court.
More recently, the UK came down firmly on the side of Georgia in last August’s conflict in South Ossetia, heavily criticizing Russia.
“If you want to only talk to Russia on the terms that Russia is interested in – that’s a particularly cowardly response,” said James Nixie, the program manager for Russia and Eurasia at Chatham House. “So just to talk about trade and economics, which are positive for the most part, would be ethically a very difficult move.”
The problems that have clouded UK-Russia relations in the last few years remain largely unsolved. However, current thinking is focused on a resetting of relations with Russia, emphasizing the positive.
At the Foreign Office, the feeling is that relations with Russia have already improved in the last year.
And although those improvements may be largely cosmetic, there are certainly areas where Russian-British interests converge – notably, Afghanistan, Iran and the Middle East.
Inside the House of Commons, the government has come under fire for delaying this visit to Moscow for so long.
“There are more important things about energy, the way we cooperate together over the future of Iran, the way in which we’re going to need increasing Russian support to try and resolve issues in Afghanistan, how are we going to deal with ongoing problems in the Middle East,” said MP Mike Hancock. “Russia is a player there, and we need to involve them with us if we are going to have any legitimacy at the negotiating table on many, many issues.”
“We have registered positive dynamics in Russian-British relations lately, political contacts have become more active and we hope Mr. Miliband’s visit will strengthen this tendency,” said Russian Foreign Ministry spokesman Andrey Nesterenko.
Ahead of the visit, Miliband characterized the discussions he hoped to have with Russian Foreign Minister Sergey Lavrov as “substantive.”
Relative issues
Still, for Miliband, it is not going to be only business on the agenda in Russia – there are some family matters to attend to as well.
His brother, the Secretary of State for Energy and Climate Change Ed Miliband, came to Russia in October to talk about global warming. He was giving an interview to the independent radio station “Ekho Moskvy” when a woman called the studio and presented herself as Sofia Davydovna Miliband, a long-lost Russian relative of the Miliband family.
“It was a fantastic experience to meet Sofia Miliband. She rang into a radio programme that I was on. I’m looking forward to keeping in touch with this fantastic woman and it has been fantastic for me and for my family,” shared Ed Miliband.
“It’s really humbling to think of someone who is in a way very close to our family but has lived such a different life,” commented David Miliband.
BBC: Miliband begins visit to Russia
David Miliband has met his Russian counterpart in Moscow on the first visit to the country in five years by a British foreign secretary.
Relations between the UK and the Kremlin reached a low after the murder in London of Russian emigre Alexander Litvinenko in November 2006.
Mr Miliband met Sergei Lavrov for dinner and informal talks, ahead of a further meeting on Monday.
Discussions are expected to cover Iran, the Middle East and Afghanistan.
According to BBC diplomatic correspondent Bridget Kendall, a senior diplomat has indicated the main focus will be on issues where Russia's collaboration is needed internationally - over Afghanistan, and over the question of Iran's nuclear programme.
The aim, said the diplomat, was to be clearer about Russia's position on Iran, and whether if current negotiations with Tehran failed, Russia would be prepared to adopt a tougher position.
ANALYSIS
Bridget Kendall, BBC diplomatic correspondent Not since July 2004 has a British Foreign Secretary been to Moscow - an extraordinarily long time, given the volume of trade between the two countries and the global problems they are both concerned about.
But relations were plunged into a freeze following the tit for tat diplomatic expulsions that followed the Litvenenko murder.
On the eve of Mr Miliband's arrival in Moscow the Russian ambassador to London was still blaming Britain for an "anachronistic" attitude and "artificial barriers" which stood in the way of improved relations.
Both countries agree they need to work together. But neither side seem to think they'll find a way past their deep seated disagreements.
The last British foreign secretary to visit Russia was Jack Straw in 2004. But Prime Minister Gordon Brown has spoken frequently with Russian president Dmitry Medvedev at international summits.
Ahead of his arrival, Mr Miliband said the UK still does not always "see eye to eye" with Russia but acknowledged it is a world power and an important trading partner.
Writing on his blog, Mr Miliband said: "We share the same global challenges and it is important that we work on them together.
"The wealth of people-to-people contacts and the dynamic business links which have grown between Britain and Russia over the last 20 years make political engagement all the more important."
The Foreign Office said Mr Miliband would meet a range of politicians, business leaders and representatives of civil society before returning home on Tuesday.
MPs' letter
Relations between Britain and Russia took a turn for the worse after former Russian security agent Mr Litvinenko was poisoned.
Moscow refused UK requests to extradite chief suspect Andrei Lugovoi and several tit-for-tat diplomatic expulsions took place as the row rumbled on.
The situation worsened further when Moscow ordered the closure of British Council offices due to alleged tax irregularities.
There have also been tensions over spying claims and a struggle over BP's interests in Russia.
Meanwhile, a group of MPs has urged Mr Miliband to raise human rights issues with Mr Lavrov.
A letter signed by MPs including Labour's Tom Watson, Tory Julie Kirkbride and Liberal Democrat Julia Goldsworthy, highlights concerns over the fraud trial of former oligarch Mikhail Khodorkovsky, which his supporters claim is politically motivated.
"It is clear that the UK must raise concerns regarding Russia's lack of respect for human rights, property rights and rule of law; and challenge the use of national energy providers as an aggressive foreign policy tool which isolates Russia from the rest of the international community," they say.
Human rights
The Foreign Office said Mr Miliband would not be attending Mr Khodorkovsky's trial.
"Whilst the legal processes in every country are a matter for that country, we always make clear the importance of human rights, the rule of law and judicial processes that are seen to be fair and transparent," a spokesperson said.
The spokesperson added that the UK had an "annual bilateral dialogue with Russia to discuss human rights as well as the opportunity to raise concerns through the EU/Russia human rights talks".
Mr Miliband's visit comes as Downing Street plays down a story in the Sunday Times which says Gordon Brown is backing him to be the EU foreign affairs chief.
A source said David Miliband has made it clear that he was not a candidate and not available.
Telegraph.co.uk: David Miliband makes first visit to Russia by Foreign Secretary in five years
David Miliband, on the first visit by a British Foreign Secretary to Russia for five years, has sought to warm relations that had plunged back to a Cold War chill by a series of bitter rows.
Published: 9:38AM GMT 02 Nov 2009
Mr Miliband said London and Moscow should work together on shared "challenges", at a meeting with Sergei Lavrov, the Russian foreign minister.
"We both know that there are big challenges that our countries face. There are a number of areas where we can find common ground," he told Mr Lavrov at the start of their talks.
"Despite the unresolved issues, we are satisfied that our economic relations are strengthening," Mr Lavrov said at the meeting, which followed on from talks late Sunday just after Miliband's arrival.
The Foreign Secretary was also due to meet business and civil society leaders during his visit to Moscow.
His trip coincides with the third anniversary of the mysterious poisoning of former Russian spy turned exiled Kremlin critic Alexander Litvinenko, a crime that led to an unprecedented degradation in ties between the two countries.
Russia has refused to extradite primary suspect Andrei Lugovoi, who British police believe may have murdered Litvinenko by lacing his tea with radioactive polonium at a London hotel on November 2, 2006.
Lugovoi, who denies involvement in Litvinenko's death, was later elected to the Duma, the Russian parliament, for a nationalist party.
Mr Miliband said in an interview published Monday in the Russian edition of Newsweek that even though Lugovoi was a member of parliament he was still a wanted man.
He added that Britain remained open to constructive proposals from Moscow that would help bring justice to this murder case.
Mr Miliband also told Newsweek that he would speak frankly about human rights in Russia, denying that Britain planned to soften its approach to win Moscow's support on pressing international issues.
Besides pushing for an improvement in relations, Mr Miliband will be seeking to secure Russian support for tough sanctions against Iran if the current round of diplomacy over its nuclear programme fails.
Moscow has so far failed to resoundingly back the Western threats against Iran, although its envoy to Tehran on Sunday said the Iranian atomic drive lacks "complete transparency".
Mr Miliband is also expected to discuss Russian co-operation for the war in Afghanistan, where British troops are involved in the troubled international effort to put down the Taliban insurgency.
Sky News: Miliband Makes Trip To Moscow To Mend Ties
12:51am UK, Monday November 02, 2009
Amanda Walker, Moscow correspondent
David Miliband, who has been a fierce critic of the Kremlin, is arriving in Moscow today on his first trip to Russia as Foreign Secretary.
One of Mr Miliband's first acts as foreign secretary was dealing with Russia's refusal to extradite Andrei Lugovoi who Britain accuses of murdering the dissident former spy Alexander Litvinenko.
Russia says it is now ready to press the reset button - but can the wounds that have festered over recent years be healed?
Mr Lugovoi, who now sits in Russia's parliament, told Sky News it was time to start afresh and move on.
"I am happy that the common sense has prevailed in the UK and that the British Foreign Minister has stopped throwing tantrums and has found a possibility to come to Russia to talk about global events rather than a scandalous yet private story that took place a few years back," he said.
Months before Mr Litvinenko's murder in 2006, Britain and Russia were engaged in their biggest espionage row in a decade - at the centre of it - a fake rock.
They will probably talk about how it's time to work more constructively on issues of mutual importance. Diplomats are very good at finding these words that are in fact empty.
Masha Lipman, Russian political analyst
Russia's state security service, the FSB, accused British diplomats of spying in Moscow, using the pretend rock to store and pass on information.
The aftermath of Mr Litvinenko's poisoning saw four Russian diplomats expelled from London. Four British ones were then immediately expelled from Moscow.
Then, British Council workers in Russia found themselves under the scrutiny of the FSB.
Britain called it intimidation, with Mr Miliband saying Russia's behaviour was "completely unacceptable".
Such tit-for-tat diplomacy prompted speculation earlier this year that a British diplomat, who was filmed with two prostitutes, was the subject of a sting operation carried out by Russian intelligence operatives.
This catalogue of clashes may continue to simmer but neither side will want to be seen to dwell too much on the negative.
Russian political analyst Masha Lipman says: "They will probably talk about how it's time to work more constructively on issues of mutual importance. Diplomats are very good at finding these words that are in fact empty.
"I don't think we should expect anything. I don't think that prior to this visit we have heard any statements, guesses or rumours of any substantial initiatives that Miliband will be bringing."
Whatever unfinished business remains there is also big business promote. Trade ties between two countries are worth £100bn.
Political differences aside Russian consumers have strong attraction towards all things British.
Familiar names like Topshop and Marks & Spencer, Barclays and HSBC adorn the high streets of Moscow.
In a still difficult economic climate - Russia and Britain are aware that disputes must not jeopardise benefits.
After the war in Georgia last year, Mr Miliband denounced Russia as "more isolated, less trusted and less respected" - this is the first meeting since those words which hardly provide a positive platform.
Guardian.co.uk: Russia is set to turn a page
Britain allowed political differences to spill over, but Miliband's Moscow visit can be a fresh start
Yuri Fedotov
The Guardian, Monday 2 November 2009
The talks in Moscow today with David Miliband are more important than the usual routine foreign minister's visit. We all know that relations between our two countries, at least at government level, have not been easy over the last couple of years. The visit is a chance to reset our relationship. Russia is determined to take advantage of this opportunity.
We see recent tensions as a break in normal relations between the UK and Russia. It is a relationship which can be seen, for instance, in the strong business links between our two countries. Trade between us has tripled over the last six years and reached more than $22bn in 2008. Britain remains the fourth biggest foreign investor in Russia.
More than 1,000 British companies now operate successfully in Russia, in sectors as varied as mining and retailing, despite the global crisis which has affected our economic ties as well. BP is part of our biggest multinational enterprise in our oilfields. Barclays, HSBC and other banks are expanding their network of branches. In turn, Russian companies seeking investment enjoy the benefits of the London Stock Exchange, enhancing the City's prestige as the world financial centre.
Against this background, it is unfortunate that there has been friction between our countries at diplomatic level. It is true, of course, that Dmitry Medvedev and Prime Minister Gordon Brown have met at a variety of international summits and our foreign ministers have remained in contact. But the fact that there has been no bilateral visit at ministerial level for five years shows that relations are not as warm or positive as they should be.
It is why Miliband's visit is an important event, and an opportunity which should not be squandered. But to put our relations on a better footing will require realism – it won't be easy to solve the direct sources of friction.
Unfortunately, the UK government has allowed political differences to spill over into the granting of visas, making it harder to encourage cultural and business exchanges. Restoration of the close co-operation that was building on terrorism policy until two years ago would also be strongly in both our countries' interest.
There are many other areas on the international stage where we have a great deal in common. Russia is a key partner in the coalition in Afghanistan. We have allowed transit of military supplies across our country and are co-operating, at many levels, with the Afghan government. We are playing our full role in international efforts to prevent nuclear proliferation. As key members of the EU3+3 group, we are working hard to find a solution which will allow Iran to develop a civilian nuclear sector but keeps it to its commitment not to develop nuclear weapons.
But it is not just through words and international diplomacy that we aim to make our world safer. The Russia-US nuclear disarmament agreement under discussion shows our ambition to cut numbers of nuclear weapons in our world.
Working together, the UK and Russia can build on all this progress. Our challenge is to ensure specific difficulties do not block wider co-operation – more vital than ever in a world in which problems vault over national borders. Climate change is not going to be addressed by any country acting independently. We all need to come together to find a solution for the benefit of all our citizens and to protect future generations.
This interdependence was underlined by the global financial and economic crisis which swept across the world. Russia has been a key partner in the unprecedented international efforts to reduce its impact on global economies.
So this is not a time to move apart but to move together. We can't make specific problems vanish overnight. But we should try harder to prevent them overshadowing a better working relationship. We hope the foreign secretary's visit shows we can turn a page in our relations based on mutual interest and respect.
November 2, 2009
Times Online: Miliband arrives on poignant anniversary but pragmatism rules now
Tony Halpin
David Miliband’s visit signals that Britain has set aside the assassination of Alexander Litvinenko in the effort to win Russia’s support for confronting Iran’s atomic ambitions.
The Foreign Secretary arrived in Russia on the very day three years ago that the dissident was poisoned with radioactive polonium-210 in a London hotel.
David Miliband’s visit signals that Britain has set aside the assassination of Alexander Litvinenko in the effort to win Russia’s support for confronting Iran’s atomic ambitions.
The Foreign Secretary arrived in Russia on the very day three years ago that the dissident was poisoned with radioactive polonium-210 in a London hotel. Andrei Lugovoy, former KGB officer, remains wanted for the crime in Britain but has since built a political career with the Kremlin’s blessing in Russia’s parliament.
The date may be the Kremlin’s little revenge, a demonstration that pragmatism trumps principle in international relations despite protestations from London about democratic values. Russia is too important and a nuclear-armed Iran too scary a prospect to stand on ceremony.
Sergei Lavrov, Russia’s Foreign Minister, has spoken of an opportunity for a “reset” in relations similar to the one initiated by President Obama.
Mr Miliband should take little encouragement from that because the American reset has been all one way so far, as Washington abandons or softens policies that irritated Moscow.
It offers a useful insight into Kremlin attitudes, however. Moscow considers London to have been fundamentally anti-Russian since the Litvinenko killing and expects Mr Miliband to show that Britain wants to mend its ways.
It may even try to look magnanimous by resolving one of the many outstanding disagreements during his visit, such as the status of the British Council in Russia.
But Russia under Vladimir Putin’s control cares little about relations with Britain. British investment has poured in despite the political climate and Mr Putin believes he can get what he wants by dealing with other European leaders.
Meanwhile, London’s political stock has tumbled because Gordon Brown has no “in” to Mr Putin and therefore little influence in Moscow.
Mr Putin believes he can get what he wants by dealing directly with other European leaders such as his old friend Silvio Berlusconi of Italy, Germany’s Angela Merkel and President Sarkozy of France.
November 2, 2009
Times Online: Miliband expecting little progress from frosty Moscow trip
Catherine Philp in Moscow
David Miliband flew into Moscow last night hoping to bring a thaw in relations with the Kremlin that have been frozen since the Cold War-style Litvinenko murder.
Moscow and Washington may boast of hitting the “reset” button in their relations since President Obama took office, but a more modest defrost is probably all that can be expected on Mr Miliband’s trip — the first by a British Foreign Secretary in five years.
Britain’s relations with Russia have been the worst of any major Western country following the fatal poisoning of Alexander Litvinenko three years ago today. Litvinenko, a former KGB officer living in exile in London, died in hospital three weeks after ingesting tea laced with radioactive polonium at an hotel. Russia has refused to extradite the man suspected of his murder, Andrei Lugovoy, a former KGB officer who now sits in Russia’s parliament for a pro-Kremlin party. The refusal led to tit-for-tat diplomatic expulsions between Moscow and London, culminating in the forced closure of British Council offices in Russia over alleged tax irregularities.
Tensions continued over Russian demands for the extradition of powerful dissidents living in exile in London, including Boris Berezovsky, a close associate of Litvinenko, and a dispute over Kremlin involvement in an ownership dispute at the Russian-British oil giant TNK-BP.
In a further incident, Sergei Lavrov, the Russian Foreign Minister, erupted in foul-mouthed fury at Mr Miliband when the British minister challenged him over Russia’s armed intervention in neighbouring Georgia last year.
Mr Miliband is not expecting miracles from this trip. Last week he acknowledged Britain and Russia “do not see eye to eye” on many matters, nor do they share many interests or values. He said he did not expect “to resolve the key problems in the UK’s bilateral relationship with Russia”.
Yuri Fedotov, Russian ambassador to London, last week blamed tensions on Britain’s “anachronistic” attitude to Russia, and criticised it for adopting “anti-Russian measures”. His remarks referred to British sanctions on Russia for its failure to extradite Mr Lugovoy, including visa restrictions on visits by Russian officials to Britain and a refusal to co-operate with the Russian security service, the FSB.
Diplomatic sources said Mr Miliband will raise the Litvinenko case but, with no breakthrough likely, tensions will persist.
He will also focus on multilateral areas where Russian co-operation is vital — ensuring future stability in Afghanistan, for example, as well as gauging Russian support for tougher measures to prevent Iran developing nuclear weapons.
November 2, 2009
Times Online: No Break in the Ice
Russia remains an obdurate enigma and not an ally in international diplomacy
As he lay dying in a London hospital, Alexander Litvinenko expressed total conviction about the identity of his killer: “The howl of protest from around the world will reverberate, Mr Putin, in your ears for the rest of your life.”
Litvinenko, a fierce critic of Vladimir Putin’s rule, was poisoned with polonium three years ago this week. He suffered a terrible, lingering death. Yet, contrary to his prediction, the protests have long subsided. David Miliband is in Moscow, on the first official visit by a British Foreign Secretary for five years.
A full British electoral cycle is an age in politics. The justification for the visit is that there are pressing pragmatic reasons for trying to gain Russian assent to Western nations’ security goals. British protests have gained little understanding, let alone concession, from the Kremlin. Yet symbols matter in diplomacy, and the symbolism here is wrong. Mr Miliband should register with his hosts more than formal displeasure at Russia’s obstructionism in the Litvinenko case. He should point to the pattern of Russian diplomacy that undermines Western efforts to promote collective security. Russia is a brute fact of international diplomacy, it is not an ally.
Russia has obdurately refused to extradite Andrei Lugovoy, the former KGB operative who is the chief suspect in Litvinenko’s murder. The British Government rightly expelled four Russian diplomats in protest two years ago. Moscow’s conduct remains scandalous.
This is not an obscure dispute over an awkward happenstance, in which the demands of realpolitik trump the requirements of justice. Litvinenko was a British citizen. His murder was an act of unspeakable brutality, committed in the heart of London. His fate replicated that of other critics of Mr Putin, such as Anna Politkovskaya, the journalist, who was shot dead in Moscow in 2006. The charge that Litvinenko’s was state-sponsored cannot be refuted, because Moscow has ensured that no trial can take place.
Regardless, Mr Miliband wrote last week: “We don’t always see eye to eye with Russia, but we share the same global challenges and it is important that we work on them together.” This is true but trite. Russia shares an interest with the West most obviously in restraining Iran’s nuclear adventurism. Yet its diplomacy has been inconstant. It has veered between support for the EU-3 (the UK, France and Germany) and refusal to exercise leverage of its own. Delphic hints from Dmitry Medvedev, the Russian President, that Russia might support additional sanctions are no firm evidence of a more constructive approach
However much Mr Miliband desires co-operation from Russia, he cannot wish it into existence. Russia does not provide it. Most brazen is its harassment of small nations on its borders: unilateral recognition of Abkhazia and South Ossetia as independent states last year; and the launch of cyber-attacks against Estonia in 2007. But the provocations are not geographically limited. Moscow’s opening to Hamas in 2006 might have been designed to sabotage Western efforts to foster Israeli-Palestinian peace.
Mr Miliband needs to raise these issues. Litvinenko’s murder cannot forestall the resumption of diplomacy. But nor should it be forgotten and forgiven, for it is emblematic of why relations with Russia are at so low an ebb.
The Independent: Miliband in key visit to Russia
By Matt Dickinson, PA
Sunday, 1 November 2009
Foreign Secretary David Miliband is making his first official visit to Russia today.
His two-day visit to Moscow - which will see him meet his Russian counterpart and a host of other officials - is also the first by a British foreign secretary to the country for five years.
Relations between the UK and Russia have been fractious in recent years due to a series of diplomatic crises, including the 2006 radiation poisoning of a Russian dissident in London and Russia's recent conflict with neighbouring Georgia.
Writing on his blog, Mr Miliband said: "We don't always see eye to eye with Russia, but we share the same global challenges and it is important that we work on them together.
"The wealth of people-to-people contacts and the dynamic business links which have grown between Britain and Russia over the last 20 years make political engagement all the more important."
Mr Miliband's visit actually coincides with the third anniversary of the polonium-210 poisoning of Russian dissident Alexander Litvinenko.
The former spy was poisoned on November 2, 2006, dying three weeks later after a major health scare in the capital.
After a lengthy investigation, British police tried unsuccessfully to extradite the chief suspect from Russia, former KGB operative Andrei Lugovoy.
His widow Marina criticised Mr Miliband's trip when it was announced last month, saying the timing was "adding insult to injury".
FINANCIAL TIMES: To Russia with dove
Published: 2009/11/02 07:36:06 AM
THE forthcoming visit to Moscow by David Miliband, Britain’s foreign secretary, at the invitation of his counterpart, Sergei Lavrov, could be of signal significance. For the past three years, Britain has had arguably the worst relationship with Russia of any major western state, one that was undermined by the 2006 murder in London of the former KGB officer Alexander Litvinenko.
Milband’s trip, the first official visit by a British foreign secretary to Moscow in five years, could put relations back on an even keel.
The UK has for some years been home to a number of prominent figures who are leading antagonists of Vladimir Putin, the Russian prime minister. Britain refuses to expel them despite the anger of the Kremlin at their presence on UK soil.
But Litvinenko’s murder by polonium poisoning three years ago remains the greatest source of tension. Britain has for several years sought the extradition of Andrei Lugovoi, the man whom UK prosecutors deem responsible for the murder. Russia has refused. As a result, the UK has imposed a range of sanctions on Russia — including visa restrictions on visits to Britain by Russian officials and a refusal to co-operate with the Russian security service.
This dispute, though serious, has not affected economic relations between the two countries. Miliband’s visit is a welcome opportunity for Britain and Russia to show that there are areas where they can co-operate at precisely the moment that the Obama administration has made it a priority to engage with Moscow.
But what Britain must not do is capitulate on the Litvinenko case — the murder was one of the more grotesque assassinations of modern times. Britain’s tough position is a reminder to the Kremlin and its agencies that it must never again countenance political murder on British soil. London, October 30
RIA: Russia, U.S. to continue nuclear arms talks on November 9
11:5202/11/2009
MOSCOW, November 2 (RIA Novosti) - Russia and the United States will continue negotiations on a new nuclear arms deal to replace the START I treaty on November 9, the Russian Foreign Ministry said on Monday.
"On October 19-30, a regular round of Russia-U.S. talks on a new accord to replace the strategic arms reduction treaty was held in Geneva. The parties continued intensive work to approve the text of a new agreement, bearing in mind that in accordance with the instructions of the presidents of both countries it must be signed by December 5, 2009," the Foreign Ministry said in a statement.
The Russian delegation in Geneva is headed by Anatoly Antonov, director of the Foreign Ministry's Department of Security and Disarmament, while the U.S. team of negotiators is led by Assistant Secretary of State Rose Gottemoeller.
START I, the basis for the Russian-U.S. strategic nuclear disarmament treaty, expires on December 5.
The outlines of the new pact were agreed during the U.S. and Russian presidents' summit in Moscow in July and include cutting both countries' nuclear arsenals to 1,500-1,675 operational warheads and delivery vehicles to 500-1,000.
START 1 obliges the countries to reduce nuclear warheads to 6,000 and their delivery vehicles to 1,600 each. In 2002, a follow-up agreement on strategic offensive arms reduction was concluded in Moscow. The document, known as the Moscow Treaty, envisioned cuts to 1,700-2,200 warheads by December 2012.
: Russia does not see dollar debate at fin min G20
Published: 01 Nov 2009 16:59:13 PST
MOSCOW, Oct 30 - The dollar is unlikely to be a major topic at next week's meeting of G20 finance ministers as the United States seems uncomfortable with discussing the topic in such a large group, a Russian delegation source told Reuters.
The dollar has sunk to its lowest levels versus the euro in over a year and has also fallen versus most other currencies, including the rouble , over the past 2 months.
This has prompted some concerns -- including in Russia -- that export competitiveness could be hurt, potentially threatening a fragile economic recovery from the recession.
"There are no plans (to discuss dollar weakness)," the source said on Friday. "I am not at all sure the Americans would be ready to discuss this topic in this format. So far the only format in which they are ready to discuss it is the G7."
The dollar is also not on the agenda for a meeting of deputy finance ministers from the Brazil, Russia, India and China (BRIC) grouping of major emerging economies on the sidelines of the G20, the source added.
Instead, the G20 ministers meeting in St Andrews, Scotland, will discuss reform of international financial institutions such as the World Bank, financial regulation, and the strategy for unwinding anti-crisis measures in the global economy.
"When and how to launch exit strategies (will be discussed), and how to carry out coordination -- in the framework of the G20 or in some other format," the source said.
Civil.ge: Georgia Denies Talks with Russia over Reopening Border
Civil Georgia, Tbilisi / 2 Nov.'09 / 12:01
Georgian Foreign Ministry denied that it was negotiating with Russia on reopening of Zemo Larsi border crossing point between the two countries, which was closed down by Moscow in 2006.
Russia’s federal agency in charge of border infrastructure reported on October 30 that during “working meeting” in the Armenian capital of Yerevan between Georgian and Russian officials the two sides “reaffirmed in principle having interest in prompt resumption of traffic” through Zemo Larsi-Kazbegi border crossing point.
Nino Kalandadze, the Georgian deputy foreign minister, said that the Georgian Foreign Ministry officials were in Yerevan last week and held talks on the matter with the Armenian counterparts, but not with the Russian officials. She said that the issue was discussed with Armenia as resumption of land traffic between Georgia and Russia “is of vital importance” for Yerevan.
Russia’s federal agency in charge of the border infrastructure also said in its press release on October 30 that the Russian delegation at the meeting was led by deputy head of the agency, Yuri Maltsev, and the Georgian side was represented by head of the Foreign Ministry’s European department, Kakha Chitadze.
It also said that the two sides exchanged information about the border crossing point’s condition and “noted that from the technical point of view it was ready for reopening.” “Results of the working meeting of experts will be passed on to the Russian and Georgian leadership for taking final decision,” the Russia’s federal agency said.
Land traffic between the two countries was closed with the closure of Zemo Larsi border crossing point by Russia in July, 2006; two others are located in breakaway Abkhazia and South Ossetia, but they are considered by Georgia to be operating illegally and entry into Abkhazia and South Ossetia from those points is banned by the Georgian laws.
B92: Latvia to stage "retaliatory" military exercises
2 November 2009 | 09:47 | Source: Ria novosti
RIGA -- Latvia is to hold large-scale military exercises next summer, in response to the Russian-Belarusian strategic exercises, held in September, a TV channel said.
The Latvian TV3 channel quoted Latvian Defense Minister Imants Liegis as saying the decision to hold the drill was already taken, although it had not been yet set what military units would be involved.
The Russian-Belarusian drill, called Zapad (West) 2009, was held on September 18-29, involving about 12,500 service personnel, 40 aircraft and 200 pieces of military equipment.
The Russian Defense Ministry said the plan for the exercises, which was developed in the late 1990s in a bid to achieve greater political, economic and military integration between the two neighbors, was "purely defensive."
However, the Baltic States expressed their concern over the drill. The Latvian defense minister claimed the exercise scenario concentrated on attacking the Baltic countries.
The Moscow Times: Russia Snubs UN Arms Trade Treaty
02 November 2009
Reuters
UNITED NATIONS — UN members on Friday overwhelmingly backed negotiations on a global treaty to regulate the world’s $55 billion weapons trade, but two big arms suppliers, Russia and China, refused to support the measure.
Most top arms suppliers — the United States, Britain, France and Germany — backed a resolution in the disarmament committee of the United Nations General Assembly that will guide negotiations on a treaty.
Only Zimbabwe voted against it, and 19 countries abstained, including major arms producers Russia, China, India and Pakistan. The resolution gained 153 votes in favor.
Despite the abstentions, diplomats said most of them planned to participate in formal negotiations on the treaty, set to begin next year.
The diplomats added that the decision by Russia and China to abstain showed there was less than unanimous support for global regulations among the big arms suppliers — and indicated treaty negotiations would be tough.
The Moscow Times: Putin, Tymoshenko Stoke Gas Fears
02 November 2009
By Irina Filatova
Prime Minister Vladimir Putin said Friday that Ukrainian President Viktor Yushchenko blocked a money transfer for Russian gas and risked provoking a new supply crisis that could disrupt flows to Europe.
“It seems we have problems with payment for our energy supplies again, which is extremely deplorable,” Putin said at a meeting with United Russia party leaders at his residence in Novo-Ogaryovo after a call with his Ukrainian counterpart, Yulia Tymoshenko.
Putin’s comments come in the run-up to a Ukrainian presidential election Jan. 17, in which Tymoshenko will challenge Yushchenko and former Prime Minister Viktor Yanukovych. Analysts have interpreted Putin and Tymoshenko’s relatively constructive partnership as a tacit endorsement from Moscow.
On Sunday, Putin also called Swedish Prime Minister Fredrik Reinfeldt, whose country holds the rotating EU presidency, to warn him of the possible disturbance, Interfax reported, citing the government press service.
Reinfeldt promised to deliver Putin’s concerns to the European Commission.
Europe watches gas ties between Moscow and Kiev very closely for signs of trouble, especially since a dispute last winter left large swaths of the EU without gas for several weeks in January.
Tymoshenko told Putin by telephone Friday that Yushchenko was impeding “the normal partnership between the Central Bank, which had the gold reserves at disposal, and the government.” The two also discussed a planned meeting in Yalta on Nov. 19 and 20, the government said in a statement.
Putin also cast the possible payment problems as a political obstacle — created by Yushchenko — rather than as a result of Ukraine’s crumbling economy.
Kiev has enough money to pay for Russian gas, Putin told the United Russia meeting, citing data from the International Monetary Fund. Kiev has gold reserves of $27 billion $28 billion, and the IMF is not opposed to using them to pay for energy supplies, he said.
Additionally, Russia has paid for its gas transit across Ukraine through the first quarter of 2010. Putin said those investments in the Ukrainian economy amounted $2.5 billion.
Yushchenko’s first deputy secretariat chief Oleksandr Shlapak said Friday that the president had urged the government to find alternative ways to pay for Russian gas instead of Tymoshenko’s proposal to get the central bank to print more money, Interfax reported.
In August, the European Bank for Reconstruction and Development promised to give Ukraine a $750 million loan to pay for the fuel, but Kiev hasn’t received “a single hryvna from the EU” so far, Putin said.
The European Commission on Thursday proposed to European Union governments that they lend Ukraine 500 million euros ($736 million).
Reuters: UPDATE 2-Putin warns EU of possible gas disruption – agency
Mon Nov 2, 2009 11:47am IST
(Adds quotes, details, background)
MOSCOW, Nov 2 (Reuters) - Russia has warned EU president Sweden of possible disruption to natural gas supplies to European consumers because of problems with main transit nation Ukraine over energy payments, Interfax news agency reported.
Russian Prime Minister Vladimir Putin raised the issue in a telephone conversation with his Swedish counterpart Fredrik Reinfeldt, whose country holds the European Union's rotating presidency, Interfax said late on Sunday.
"During the conversation, Putin drew the attention of the EU leadership to signals, including those received via official channels from Kiev, of possible problems with payments for Russian gas supplies," it said, quoting Putin's press service.
"As Putin stressed, as a result of all this, 'problems with Russian gas transits across Ukraine's territory aimed for European consumers could arise'."
Russia cut gas supplies to western Europe via Ukraine in January 2006 and again in January this year during disputes with the former Soviet republic over gas prices and payments. Supplies to EU customers were disrupted in the middle of winter.
Last Friday, in a telephone talk with Ukrainian counterpart Yulia Tymoshenko, Putin accused Ukrainian President Viktor Yushchenko of risking to provoke a new gas crisis in Europe.
Tymoshenko is Yushchenko's main political foe and a frontrunner for a Jan. 17 presidential election.
Diplomats have said Russia may be wary of entering a new gas dispute with Kiev on the eve of the vote, which Moscow hopes will bring a more pro-Russian president to power.
Ukraine's deep economic crisis has raised fears about its ability to pay for Russian gas. (Reporting by Dmitry Solovyov)
Upstreamonline: Ukraine vote revives gas dispute risks
Wire services
A standoff between Ukrainian political forces ahead of a presidential election poses risks for Russian gas supplies to Europe, a Kremlin aide said on Saturday.
Russia cut gas supplies to Western Europe across Ukraine in January 2006 and again in January this year during a row with its ex-Soviet neighbour over gas prices and payments, disrupting supplies to EU customers in the dead of winter.
Russian Prime Minister Vladimir Putin said on Friday that Ukrainian President Viktor Yushchenko risked provoking a new gas crisis, after a telephone conversation with Ukrainian Prime Minister Yulia Tymoshenko, Yushchenko's main political foe and a frontrunner in a 17 January presidential election.
"The situation is risky because of the election campaign taking place in Ukraine," Arkady Dvorkovich, the Kremlin's top economic adviser, told Reuters on the sidelines of the World Policy Conference in the Moroccan city of Marrakesh.
Russia's Gazprom, the world's biggest natural gas company, supplies a quarter of the European Union's gas, most of it through pipelines across Ukraine.
The Russian warnings raise the spectre of a new gas dispute, even though diplomats say Russia may be wary of sparking a row with Kiev on the eve of a vote which Moscow hopes will bring a more pro-Russian president, possibly Tymoshenko, to power.
Yushchenko came to power on the back of the 2004 "Orange Revolution" protests against a Moscow-backed candidate.
Russian President Dmitry Medvedev ruled out in August any improvement in relations with Ukraine under its current leader.
"We believe that as soon as this political process is completed, the sooner we will be able to get a solution," Dvorkovich said.
He said the European Union should help Russia create binding mechanisms for conflict resolution and to guarantee payments.
Monday, 02 November, 2009, 01:40 GMT | last updated: Monday, 02 November, 2009, 01:41 GMT
The News: France, Russia in arms deal [pic][pic][pic]
Sunday, November 01, 2009
MOSCOW: France will send a warship to Russia in November in the run up to an unprecedented deal to sell it a helicopter carrier, a top defence ministry official said on Saturday, RIA Novosti reported.
“In November, the Mistral helicopter carrier will arrive on a visit to Saint Petersburg,” the first deputy chief of the navy general staff, Oleg Burtsev, told the news agency.
Burtsev also confirmed that Russia was planning to purchase one of the Mistral warships and to construct a further four warships under license. “We plan to buy one Mistral-class ship in France and with technical support from the French to build four helicopter carriers of this class under license,” Burtsev told the news agency. Burtsev said that he attended talks on the warship deal in France two weeks ago and that France agreed to Russia’s proposal to buy the ship, RIA Novosti reported.
The Mistral warship can carry 16 heavy helicopters, landing-craft and troops and can also act as a command and control vessel. Burtsev did not name a price, but the ship is set to cost up to 500 million euros RIA Novosti reported on Saturday, citing French media.
The Russian armed forces chief of staff, General Nikolai Makarov, said in August that Moscow planned to buy a Mistral in an unprecedented deal that experts said reflected Kremlin efforts to accelerate military modernisation.
The naval commander-in-chief Vladimir Vysotsky raised questions over the deal in September when he said that Russia might look to Spain or the Netherlands to buy the ship-building technology.
Since World War II Russia has insisted on producing all military hardware for its own use and export, but it has failed to keep up with the West.
In recent years, Russia has talked a lot about modernising its armed forces, which still rely heavily on Soviet-era equipment, and steadily increased its procurement budgets during Vladimir Putin’s presidency. The Mistral-class warships would be based at Russia’s northern and Pacific fleets but might also be used against Somalian pirates, Burtsev said.
“The ships are being acquired for troop-carrying, peace-keeping and rescue operations. What’s more, this ship can be effectively used for fighting pirates, including those off the coast of Somalia,” Burtsev told RIA Novosti.
Russia is one of several countries to have sent naval ships to the coast of Somalia to try to combat the rising tide of attacks on vessels passing through the strategic Gulf of Aden.
Itar-Tass: Khasavyurt warlord destroyed in Dagestan
02.11.2009, 07.30
MAKHACHKALA, November 2 (Itar-Tass) -- Local warlord Arslan Egilbayev, 30, was destroyed in a special operation in the city of Khasavyurt, Dagestan, on Monday. Another Khasavyurt gunman Amir Sailmgereyev, 27, was also killed, a source in the public relations group in the Federal Security Service department in Dagestan told Itar-Tass on Monday.
According to the source, the operatives have found a dead woman, under which a grenade was hidden, in a flat, where the gunmen were blocked. The passport for Ashura Magomedova, 27, was found.
The commandoes of the Federal Security Service and the police have blocked several gunmen in a two-room flat on the first floor of the five-storey apartment block in Shchorsa Street in the small hours on Monday. In reply to the surrender demands the gunmen opened fire. The anti-terrorist operation regime was introduced at 01.20 a.m. Moscow time in the area of the three streets of the city.
In the clash two gunmen removed the bars on the windows that were cut in advance and were attempting to escape returning the fire. However, they were destroyed in the shootout. The anti-terror operation regime was cancelled at 05.50 a.m. Moscow time. The evacuated dwellers returned in their flats. Two submachine guns, grenades, a big amount of ammunition, as well as the religious literature were found in the flat, where the gunmen had entrenched. Investigative measures are underway at the operation site.
RIA: Three militants killed in Russia's Dagestan
08:2502/11/2009
MAKHACHKALA, November 2 (RIA Novosti) - Three militants were killed early on Monday in a special operation in the capital of the southern Russian republic of Dagestan, a regional Federal Security Service official said.
"Three militants, including a young woman, were killed in the Khasavyurt district [of Makhachkala] as the result of a special operation," the spokesman told RIA Novosti, adding that no servicemen were injured.
He said one of the militants was identified as Arslan Egizbayev, the leader of a militant group operating in Khasavyurt district. The two others were Amir Salimgereyev and Ashura Magomedova.
The militants were surrounded in an apartment block overnight by Federal Security Service personnel. They refused to surrender and were killed in a shootout when they tried to escape from the building, the spokesman said.
He added two Kalashnikov assault rifles, three grenades and lots of ammunition were found in the apartment where the militants were hiding.
Dagestan and other mainly Muslim republics in Russia's North Caucasus, including Chechnya and Ingushetia, have seen a marked rise in militant violence of late, with skirmishes and attacks on police and other officials being reported almost daily.
RIA: Imam of village mosque killed in Dagestan
01:2702/11/2009
MAKHACHKALA, November 2 (RIA Novosti) - The imam of a village mosque in Dagestan was killed on Sunday in the volatile Russian North Caucasus republic, a local police spokesman said.
"About 19:45 Moscow time [16:45 GMT], the imam of a local mosque, Tinamagomed Ramazanov, was shot dead by unidentified people in the village of Bavtugai in Kizilyurt district," the spokesman said.
He said investigators were working at the scene.
Russia's mainly Muslim North Caucasus republics, especially Chechnya, Dagestan and Ingushetia, have seen an upsurge of militant violence this year, with frequent attacks on police and officials.
02 November 2009, 10:24
Interfax: Imam of village mosque shot dead in Dagestan
Makhachkala, November 2, Interfax - The imam of a rural mosque was shot dead Sunday evening in the village of Bavtugai, Kizilyurt district, the Republic of Dagestan.
Tinamagomed Ramazanov, 34, was killed at about 7:45 p.m. when he was returning home from his evening prayer in the mosque, the press service of the Dagestani Interior Ministry told Interfax.
"A search for the unidentified gunners was immediately launched and a team of investigators and detectives is now working at the scene," a press officer said.
RIA: Grenades fired at Russian Interior Ministry building in Nazran
20:3301/11/2009
ROSTOV-ON-DON, November 1 (RIA Novosti) - An Interior Ministry building in Ingushetia came under fire on Sunday from rocket-propelled grenades and automatic weapons, with one police officer injured, a spokesman said.
"At about 19.30 Moscow time [16:30 GMT], rocket-propelled grenades and automatic weapons were fired at a regional police department building in Nazran. According to preliminary reports, one member of a temporary Interior Ministry task force was hurt," the spokesman said by telephone.
He added that investigators were working at the scene.
Russia's mainly Muslim North Caucasus republics, especially Chechnya, Dagestan and Ingushetia, have seen an upsurge of militant violence this year, with frequent attacks on police and officials.
Nazran, the largest city in Ingushetia, saw the worst attack in August, when at least 20 officers died in a truck bombing at the police headquarters.
Russia Today: US diplomat spotted at illegal rally in Moscow – report
02 November, 2009, 12:00
Moscow police have caught a Bond, but not the James Bond. A senior US embassy official named Bond was allegedly detained at an unauthorized opposition rally on Saturday in central Moscow.
The news comes from popular Russian blogger Norvezhsky Lesnoy, who caught the man waving his diplomatic ID at policemen on camera. It lists him as “R.K. Bond, Second Secretary, Vice-Consul of the US Embassy”.
He was reportedly detained along with over 50 other participants of the rally and was consequently released.
The US embassy has not commented on the incident.
Police say the rally was not authorized because a military festival had already been scheduled for the same place at the same time.
More than half of those detained are thought to be from the pro-Kremlin youth movement “The Young Russia”, who were trying to stop the demonstration.
RFERL: Russian Police Detain 50 At Human Rights Protest
October 31, 2009
MOSCOW (Reuters) -- Russian police said they detained at least 50 people on October 31 at an unsanctioned human rights protest in central Moscow, but protesters put the number higher.
Police dragged off dozens of people to waiting buses and jostled scores of reporters towards metal barriers while protesters continued to chant "Freedom!" and "Respect the constitution!"
"I want Russia to be free, not to rot in a policeman's nightmare," said a protester in a black mask who refused to give his name for fear of reprisals.
Moscow police spokesman Viktor Biryukov said about 50 people had been detained at the protest which he said was attended by about 100 people and 100 reporters.
Opposition activists said about 70 people had been detained and that 500 people had showed up.
Hundreds of police and Interior Ministry troops encircled the "march of the discontented" on Triumfalnaya Square, just a few kilometers north of the Kremlin. Unlike previous protests, riot police were not used to make arrests.
Human rights groups say the Kremlin has muzzled the media and rolled back freedoms since Vladimir Putin was first elected president in 2000 and the situation has not improved under his protege, President Dmitry Medvedev.
Putin is believed by many diplomats and Russian citizens to be the real ruler in Russia despite stepping down as Kremlin chief to become prime minister in May 2008.
Lyudmila Alexeyeva, a Soviet dissident and one of Russia's best known human rights campaigners, attended the protest with a police colonel, an escort she said was needed to ensure she was not crushed by the crowds.
"I came here to defend the constitution," Alexeyeva, 82, told Reuters as she was pushed towards metal barriers by a crowd of police, reporters and protesters.
Financial Mirror: Russian FM to visit Cyprus
November 02, 2009
Russian FM Sergei Lavrov will pay a visit to Cyprus November 4-5 at the invitation of his Cypriot counterpart Marcos Kyprianou.
A spokesman for the Russian Embassy in Nicosia told CNA that during his visit to the island, Lavrov will be received by Cyprus President Demetris Christofias. He will also hold talks with Kyprianou and will have a meeting with House President Marios Garoyian.
He also said that agreements are expected to be signed during Lavrov’s visit with a view to promote bilateral relations between the two countries.
OfficialWire: Russia Test-Fires Ballistic Missile
|Published on November 02, 2009 |
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|by EU News Network |
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|( and OfficialWire) |
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|MOSCOW, RUSSIA |
A Russian nuclear submarine has successfully test-fired a ballistic missile, officials say.
The launch Sunday involved an intercontinental ballistic missile fired from the submerged submarine Bryansk in the Barents Sea, Russia's Ministry of Defense announced. The Bryansk can carry 16 ballistic missiles.
The success follows a series of embarrassing failures for Russia in tests on its new-generation Bulava missile, the French news agency AFP said. An attempted launch from a submarine failed in the most recent test in October, the report said.
Russia's nuclear forces include land-based missiles, nuclear submarines with sea-launched missiles and strategic bombers equipped with nuclear bombs and nuclear-capable cruise missiles, Russia's RIA-Novosti reported.
Strategy Page: Trashing The MiG-29
November 2, 2009: Malaysia[pic] admitted that it is getting rid of its MiG-29 fighters because the aircraft are too expensive to maintain. It costs about $5 million a year, per aircraft, to keep them in flying condition. Three years ago, Malaysia bought two more MiG-29s, in addition to the 18 it got in the 1990s. Two of those were lost due to accidents. Malaysia has since ordered 18 Su-30 fighters, and will apparently order more to replace the MiG-29s. Malaysia also bought eight F-18Ds in the 1990s, and is getting rid of those as well. Russia[pic] has offered better prices on maintenance contracts for new Su-30s, in addition to bargain (compared to U.S. planes) prices.
Most of the MiG-29s provided satisfactory service. Malaysia was long a users of U.S. aircraft, so they have been able to compare Russian and American warplanes. The Russian aircraft cost less than half as much as their American counterparts. The Malaysians find that an acceptable situation, even though they face better trained pilots flying F-16s in neighboring Singapore[pic].
The MiG-29 entered Russian service in 1983, as the answer to the American F-16. Some 1,600 MiG-29s have been produced so far, with about 900 of them exported. The 22 ton aircraft is roughly comparable to the F-16, but it depends a lot on which version of either aircraft you are talking about. Russia is making a lot of money upgrading MiG-29s. Not just adding new electronics, but also making the airframe more robust. The MiG-29 was originally rated at 2,500 total flight hours. At that time (early 80s), Russia expected MiG-29s to fly about a hundred or so hours a year. India, for example, flew them at nearly twice that rate, as did Malaysia. So now Russia is offering to spiff up the airframe so that the aircraft can fly up to 4,000 hours, with more life extension upgrades promised. This won't be easy, as the MiG-29 has a history of unreliability and premature breakdowns (both mechanical and electronic).
Recently, Russia grounded all of its MiG-29s in order to check for structural flaws. Compared to Western aircraft, like the F-16, the MiG-29 is available for action about two thirds as much. While extending the life of the MiG-29 into the 2030s is theoretically possible, actually doing so will be real breakthrough in Russian aircraft capabilities. The Indians are going to take up the Russians on their upgrade offer. But the Malaysians are going to go with the more highly regarded Su-30. Malaysia expects to have all its MiG-29s out of service in about a year. If they can't be sold, they will simply be scrapped. Algeria, and several other nations, have turned down the MiG-29, which has acquired the reputation of being second rate and a loser.
RIA: Russian rocket puts 2 European satellites into orbit
08:4102/11/2009
MOSCOW, November 2 (RIA Novosti) - Two European satellites, the SMOS spacecraft and the Proba-2 mini-satellite, were successfully put into orbit by a Rokot carrier rocket on Monday, a spokesman for Russia's Federal Space Agency said.
The satellites were launched from the Plesetsk space center in northwest Russia earlier on Monday.
"The launch of the rocket and the insertion [into orbit] took place in accordance with the schedule," the Roscosmos spokesman said.
The 665-kg SMOS (Soil Moisture and Ocean Salinity) spacecraft, being put into the orbit at an altitude of 756 km (470 miles), is to produce global maps of high resolution and sensitivity showing variations in soil moisture and saline levels in the world's oceans. The mission is part of ESA's Earth Explorer Envelope Program.
The 130-kg Proba-2 (Project for On-Board Autonomy) research satellite will test new technologies for autonomous space missions for ESA's Technology Directorate.
The Rokot launch vehicle is a modified version of the Russian RS-18 (SS-19 Stiletto) intercontinental ballistic missile. It uses the two original lower stages of the ICBM, in conjunction with a Breeze-KM upper-stage for commercial payloads.
This is the third Rokot launch of 2009. In March, a Rokot launch vehicle successfully put into orbit the European GOCE satellite, which will measure and map the Earth's gravitational field. In July, a Rokot with three Russian Cosmos-series military satellites was launched by Russia's Space Forces from the Plesetsk space center.
Nov 2, 2009
The Straits Times: Russia launches satellites
MOSCOW - RUSSIA has successfully launched a Rokot rocket carrying two European satellites into space from its military spacedrome of Plesetsk, the RIA Novosti news agency reported early on Monday.
'The launch of the Rokot rocket carrying SMOS and Proba-2 satellites made for the European Space Agency was successful,' a Russian space official was quoted as saying.
SMOS (Soil Moisture and Ocean Salinity) is due to collect radio signals emitted by water cells on the Earth's surface, allowing it to determine changes in the water cycle due to global warming and other climate changes.
The satellite will provide maps of soil humidity from its 758-kilometre-high orbit, as well as measure ocean salinity with its 69 linked antennas.
Proba-2 is part of the Project for Onboard Autonomy, and is due to test space equipment in real spaceflight conditions. – AFP
RIA: Russia to start swine flu vaccine tests on children on Monday
03:1602/11/2009
MOSCOW, November 2 (RIA Novosti) - Russia is planning to start testing swine flu vaccines on children on Monday, a deputy health minister said.
Veronika Skvortsova said the results of clinical tests on adults showed the vaccines were safe.
According to Russia's Health Ministry, four swine flu vaccines have been so far registered in the country.
A spokesman for the Microgen company involved in producing the vaccines said Russia's health watchdog Roszdravnadzor allowed testing the vaccines on children, adding the tests were set to be conducted at medical research institutions in the cities of St. Petersburg, Smolensk and Perm.
A spokesman for Petrovaks, another company involved in producing swine flu vaccines, earlier said the company was also ready to start testing the vaccines on children.
The production of two vaccines against swine flu has already started in Russia, with at least 35.5 million single doses expected to be produced by the end of the year.
Five deaths from the H1N1 virus have been so far registered in the country. Three fatalities were reported in the east Siberian city of Chita, one in Moscow, and another one in the Siberian Krasnoyarsk region. The total number of officially confirmed swine flu cases in the country has reached almost 1,900.
Russia's chief sanitary official, Gennady Onishchenko, earlier said the swine flu cases began growing considerably in October, traditionally the time for a seasonal flu outbreak. The country plans to start a swine flu vaccination program in December.
According to the World Health Organization, more than 5,700 people have died from swine flu worldwide, and the total number of officially confirmed cases has exceeded 440,000, as of October 25.
Large-scale immunization campaigns aimed at fighting swine flu are underway in several countries, including the United States and Japan.
RIA: Number of swine flu cases in Russia's Kamchatka rises to 54
06:3802/11/2009
PETROPAVLOVSK-KAMCHATSKY, November 2 (RIA Novosti) - The number of people confirmed as having the H1N1 virus, commonly known as swine flu, in Russia's Far East Kamchatka Territory has grown to 54, local health ministry spokesman said.
"Thirty-seven children and 17 adults have been confirmed as having swine flu in Petropavlovsk-Kamchatsky and the Elizovsky district," the spokesman said, adding 32 people had light infections and 22 were in a moderately serious condition. Thirty-five people had been hospitalized, he said.
"We have enough medicine and places in hospitals," the spokesman added.
The first case of swine flu infection was registered in Petropavlovsk-Kamchatsky on October 21, three days after an infected 11-year-old boy was hospitalized.
Five deaths from the H1N1 virus have been so far registered in Russia. Three fatalities were reported in the east Siberian city of Chita, one in Moscow, and another one in the Siberian Krasnoyarsk region. The total number of officially confirmed swine flu cases in the country has reached almost 1,900.
Russia's chief sanitary official, Gennady Onishchenko, earlier said the swine flu cases began growing considerably in October, traditionally the time for a seasonal flu outbreak. The country plans to start a swine flu vaccination program in December.
According to the World Health Organization, more than 5,700 people have died from swine flu worldwide, and the total number of officially confirmed cases has exceeded 440,000, as of October 25.
Leagle: Russian Supreme Court Believes No Death Sentences Can Be Passed Next Year
Daily News Bulletin; Moscow - English October 31, 2009
MOSCOW. Oct 31 (Interfax) - The Russian Supreme Court chairman believes Russia has to continue to abide by the European Convention for the Protection of Human Rights and its protocols on the abolishment of the death penalty.
"It is absolutely clear to us in the Supreme Court that we should abide by the provisions of the European Convention for the Protection of Human Rights and Fundamental Freedoms and those on the abolishment of the death penalty, which have been signed by Russia," Supreme Court Chairman Vyacheslav Lebedev said in an interview with Interfax.
Hence, in the Supreme Court's view, "our courts will not be entitled to hand down death sentences starting January 1, 2010," he said.
The Supreme Court recently asked the Constitutional Court to make it clear whether death sentences can be handed down in Russia next year, because judges "may wonder how to apply the Constitutional Court's [1999] judgment starting January 1, 2010," Lebedev said.
In February 1999, the Constitutional Court passed a judgment "Clause 5 of which says that death sentences cannot be pronounced until the right to a jury trial is guaranteed in the whole of Russia," Lebedev said.
This judgment is still in effect, Lebedev said. "However, starting January 1, 2010, jury trials will be in place in all regions of Russia without any exception. The Chechen Republic has been an exception so far, but a provision on introducing jury trials will take effect there on January 1 next year as well," he said.
"Therefore, in order to dispel any doubts, the Supreme Court has appealed to the Constitutional Court to explain its own judgment," Lebedev said.
While Russia signed the protocol to the European Convention on Human Rights on abolishing the death penalty in 1997, the Russian parliament has still not ratified it, he said.
"Nevertheless, in line with international legal standards, a country that has signed an international treaty, even if it has not ratified it but has not clearly expressed its desire to withdraw from it, should observe it," Lebedev said.
The Russian law stipulates that only the Constitutional Court, and not the Supreme Court, can explain and interpret its judgments, Lebedev said. "It would be incorrect, unethical, and absolutely wrong if other courts could explain Constitutional Court judgments," he said.
The Russian Constitutional Court is to convene on November 9 to consider a Supreme Court request that the Constitutional Court's judgment of February 2, 1999 be clarified as regards the possibility of passing death sentences after jury trials are introduced on the entire territory of Russia starting January 1, 2010.
The full version of the interview will be available later at interfax.ru.
(c) 2009 Daily News Bulletin; Moscow - English. Provided by ProQuest LLC. All rights Reserved.
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The Moscow Times: National Census Back On for 2010
02 November 2009
Vedomosti
Prime Minister Vladimir Putin said Friday that 10.5 billion rubles ($360 million) would be allotted by the government to conduct the census next year, scrapping a plan to delay it by two or three years to save on funds.
“You raised this question,” Putin told United Russia leaders in making the announcement, Prime-Tass reported.
He said Mikhail Shmakov, head of the Federation of Independent Labor Unions, had also recently raised the census.
In August, the State Statistics Service and government began saying the census could be pushed back by two years, and later some even said it could be delayed until 2013. But the plan drew criticism from some politicians and economists.
Since the government reconsidered its plan, “the situation isn’t hopeless, you can influence it. It means that the people making decisions are capable of responding to opinions from experts,” said Vladimir Bessonov, director of the Institute for Information Development at the Higher School of Economics.
The census will most likely be performed by the new head of the State Statistics Service. Acting chief Alexander Surinov, a former deputy, is currently leading the body. Former statistics chief Vladimir Sokolin said last month that he was leaving because the service had been put back under the Economic Development Ministry and because of the planned census delay.
Russia Blog: Putin: Census 2010 Is a Go
Yuri Mamchur
November 1, 2009
In his recent article, Bruce Chapman—Discovery Institute’s President and former Director of the White House Census Bureau—rightly criticized the Russian government for cancelling the scheduled 2010 Census. (The census was moved to 2013). We want to believe that it was Russia Blog’s criticism that forced prime-minister Vladimir Putin to revisit the issue. The original official reason for the census cancellation was the lack of budget funds. While FSB, among many other government agencies, is using taxpayers’ money to renew its branches’ auto-fleets with brand new bullet-proof Mercedes-Benz’s S 350 L 4Matic (yes, with expensive woods, luxurious leather, hi-end stereos, and iPhone connectors; any U.S. FSB agents want to change their employer?), it was extremely hard to believe that Russian economy was doing that bad. Russia’s Census Bureau (RosStat) was despaired by the cancellation, as they had spent significant funds and effort preparing for the act.
In Russia, criticism of the census cancellation was very muffled, as most Russians sincerely don’t understand its value. Most likely, Medvedev and Putin were not afraid to reveal the information that could be compared to the one of 10 years ago; even with the global financial crisis, it is very hard to beat Russia’s humiliating conditions at the end of Yeltsin’s era. It still remains a secret what exactly moved the Kremlin to cancel the census in the first place. What Russian government most likely hadn’t realized were the potential economic consequences had census been canceled. International corporations use census results for their marketing, expansions, hiring, and other business objectives, and the corporate-oriented Kremlin must have heard that message loud and clear. The census, according to Putin, will take place in 2010, and the Russian government committed the necessary 10.5 billion rubles (360.5 million USD) to finalize the effort.
November 2. 2009, 10:28
The crisis has left without work for more than 750 thousand Russians
/Google translation/
November 2. Interfax-Russia.ru - Since the beginning of the economic crisis in Russia had been dismissed more than 750 thousand people, of which about 200 thousand managed to find a job, said Monday in MHSD RF.
"Since the beginning of October 2008 the total number of laid-off workers reached 751 thousand 407 people. Among them were employed 205 thousand 847 people, including 117 thousand 102 people - to the former organization" - the ministry said, citing the latest data MHSD ongoing monitoring of the labor market in the Russian regions.
Meanwhile, according to MHSD Russia on October 26, with the economic crisis of lost work 741 thousand 432 people, of whom 203 thousand were employed 588 people, including 115 thousand 598 people - in previous organizations.
And, according to MHSD Russia on October 19, from the beginning of October 2008 the total number of laid-off workers reached 731 thousand 002 people, of whom 200 thousand were employed 376 people, including 113 thousand 845 people - in previous organizations.
RIA: Moscow News to relaunch Arabic version
12:0802/11/2009
LONDON, November 2 (RIA Novosti) - RIA Novosti will relaunch the Moscow News paper in Arab in the next few days after a 17-year break, the editor-in-chief of the Russian news agency said.
To begin with, MN in Arab will be a monthly publication with a circulation of 150,000 copies in 16 Arab countries. If it proves a success, the paper could switch to weekly or even daily editions, Svetlana Mironyuk said on Sunday.
The move is part of a new strategy the Russian government has drafted to consolidate relations with the Arab world in all spheres, primarily in politics and the economy.
Russia's trade with the Arab world currently amounts to $10 billion. The strategy is aimed at expanding cooperation with all Arab nations, not just Russia's closest partners in the region, Syria and Algeria.
Investment, interbank cooperation, hi-tech and IT could be potential cooperation spheres between Russia and Arab states. Russia is ready to supply booster rockets for the launch of Arab satellites.
In an interview with the London-based Asharq Al-Awsat, Mironyuk said Russia had long enjoyed friendly, mutually respectful relations with Arab countries.
"Today, Russia is regaining its place as a serious political player in the Middle East, fighting for the establishment of a lasting and just peace in the region," the RIA Novosti director said.
She explained the "fog" covering Russian-Arab relations came from the fact that Arab nations "have been feeding on what the West has printed about Russia."
She gave the Asharq Al-Awsat the first issue of MN in Arabic. The front page carries a message to readers from Prime Minister Vladimir Putin.
November 1, 2009
Times Online: Moscow’s iron mayor, Yuri Luzhkov, loses grip
A whiff of corruption threatening the career of Russia's third most powerful politician
Mark Franchetti in Moscow
He has branded homosexuals satanic, deployed cloud–seeding fighter jets to ensure good weather on bank holidays and ordered riot police to break up anti-Kremlin demonstrations. As mayor, Yuri Luzhkov has ruled Moscow with an iron fist for the past 17 years.
But with only two years of his fourth term left to serve, the populist mayor is coming under a barrage of criticism which some believe could signal the beginning of the end for Russia’s third most powerful politician.
The most common criticism levied at Luzhkov is that he has used his influence to help the business interests of Yelena Baturina, his wife of 18 years and Russia’s wealthiest woman.
In an unprecedented public attack, Vladimir Zhirinovsky, the pro-Kremlin ultranationalist leader, last week called for Luzhkov to resign for presiding over “the dirtiest and most corrupt local government in the history of Russia, one which is the stage for the worst kind of fraudulent schemes”.
Zhirinovsky also accused the mayor of fixing recent local elections to favour a pro- Kremlin party.
In a recent opinion poll, voters were asked whether “you believe the rumours about Luzhkov being corrupt and that he provides business assistance to his own wife”; 61% answered yes. Just 1% dismissed the rumours as “definitely not true”. The mayor’s popularity has plummeted to 36%, down by nearly half since April.
“The campaign against Luzhkov is being waged by proKremlin forces. There is an order to hound him, but we won’t take part in this,” said Sergei Mitrokhin, leader of the liberal Yabloko party, which, in a sign of the Kremlin’s grip over parliament, has lost all its deputies.
“We don’t want to see him removed because then they could appoint somebody who was unelected and who would do to Moscow anything the Kremlin happens to want.”
In September Boris Nemtsov, a leading opposition politician, published a report in which he accused city hall of awarding lucrative contracts to Baturina’s construction company, Inteko, at the same time as her husband has presided over Moscow’s greatest building boom since the Stalin-era. Critics accuse Luzhkov of allowing city hall to pull down hundreds of historic buildings to make way for glitzy building projects.
“We’ve irrefutable proof,” claimed Nemtsov, “that Luzhkov favoured Inteko while signing permits for commercial development, making Baturina the richest woman in Russia.”
Leonid Gozman, another member of Russia’s beleaguered opposition, publicly called for Luzhkov to be held responsible for Moscow’s rampant corruption.
Baturina, 46, and Luzhkov, 73, have vehemently rejected all accusations and are suing both Nemtsov and Gozman. Luzhkov described Nemtsov’s report as “full of lies”.
The mayor said he had filed about 10 lawsuits a year for the past 17 years — many of which were linked to claims about his wife’s business success. “It’s an impressive figure,” he said.
Baturina, who rose from being a factory worker to Russia’s only female dollar billionaire — said by Forbes magazine to have a post- financial-crisis fortune of £550m — has rejected claims she owes her rise to Luzhkov. Some Russian experts believe her real fortune to be greater than Forbes’s estimate.
In a further blow to the image of Moscow’s first couple, Shalva Chigirinsky, formerly one of the city’s biggest property and oil tycoons, recently claimed in papers submitted to London’s High Court that Baturina secretly owned a stake in an oil producer.
According to Chigirinsky, he entered into a partnership with Baturina in 1999 because “no major projects can proceed in the city without her backing”.
Baturina has said that the claim of a partnership in the oil producer with Chigirinsky is “not only incorrect, it’s the opposite of the truth”.
Some Moscow insiders say the campaign against Luzhkov began after Vladimir Putin, the prime minister, shut down a sprawling wholesale market on suspicion that it was selling smuggled goods.
The market was owned by Telman Ismailov, a close friend of Luzhkov’s, who is believed to have angered Putin by spending £40m on an extravagant party to launch a new hotel in a Turkish resort.
Despite the economic crisis, Ismailov flew in 242lb of beluga caviar and paid Paris Hilton, Sharon Stone and Richard Gere to attend the opening party of the Mardan Palace, which boasts 560 rooms and a five-acre pool and cost £1 billion to build. Ismailov’s subsequent problems were interpreted by some as a warning shot to Luzhkov, who also attended the party.
“In my view we are seeing the beginning of the end of Luzhkov’s long reign,” said a former Kremlin aide who knows the mayor. “He’ll either be asked to step down before the end of his term or will be told not to run again.
“Either way, the Kremlin is starting to look around for someone to take over one of Russia’s most lucrative and powerful posts.”
National Economic Trends
Reuters: Russia c.bank injects 18.8 bln roubles via repos
MOSCOW, Nov 2 (Reuters) - The Russian central bank injected 18.8 billion roubles ($647.4 million) of one-day funds into the banking system at a rate of 6.98 percent in its first repo auction of the day on Monday.
The minimum interest rate was set at 6.75 percent.
A maximum of 30 billion roubles had been on offer at the two repo auctions scheduled for the day.
Following are results of the latest auction, provided by the central bank on its Web site (cbr.ru):
Date Nov 2 Oct 30 Oct 30
Session 1st 2nd 1st
Amount (bln rbls) 18.81 0.19 42.63
Bids (bln rbls) 18.81 0.19 42.63
Average rate 6.98 7.41 7.03
NOTE - For details of central bank repo tenders click here .
($1=29.04 Rouble) Keywords: RUSSIA REPO/FIRST
(Moscow Newsroom; +7495 775 1242; moscow.newsroom@)
RIA: Russia's inflation to stay under 10% in 2009 - Central Bank
11:2302/11/2009
MOSCOW, November 2 (RIA Novosti) - Russia's inflation is unlikely to exceed 10% in 2009, which has allowed the country's top bank to cut refinancing rate several times since the start of the year, a Central Bank official said on Monday.
"We are heading for inflation obviously under 10%," Central Bank First Deputy Chairman Gennady Melikyan said at a meeting between bankers and the management of Russia's monetary regulator.
Russia's Central Bank cut on October 30 its key lending rate by 0.5 percentage points to 9.5% per annum following a slowdown in consumer price growth.
The rate is the lowest since Russia started its transition to a market economy in the early 1990s. The previous rate of 10% per annum was set from September 30, 2009.
Analysts say the move is intended to bring down interest rates on loans granted to the real sector to help domestic business amid the ongoing economic crisis.
The Bank of Russia has now cut the refinancing rate eight times since the start of the year, when it was 13%.
Bloomberg: Russia Manufacturing Slips Into Contraction as Recovery Stalls
By Alex Nicholson
Nov. 2 (Bloomberg) -- Russia’s manufacturing industry contracted in October as companies cut jobs and failed to build up inventories, casting doubt on the strength of the recovery.
VTB Capital’s Purchasing Managers’ Index dropped to 49.6 from 52 the previous month, the Moscow-based bank said in an e- mailed statement today. A reading below 50 signals contraction. The index had been rising month-on-month from a record low of 33.8 in December and returned to growth for the first time in 14 months in September. The bank surveyed 300 purchasing executives.
Output was “negatively affected by acceleration in job shedding and inventory depletion,” Dmitri Fedotkin, an economist at VTB Capital in Moscow, said in a statement. New export orders posted a “notable decline” while companies were hampered by a “strong rise in costs associated with metals, energy and oil-related items.”
Businesses are struggling to stay afloat as banks withhold credit and as the export outlook remains uncertain. The central bank last week cut the key interest rate to a record-low 9.5 percent in a bid to reduce the cost of bank loans and aid corporate investment to drag the economy out of its deepest slump since the collapse of the Soviet Union. Gross domestic product contracted an annual 10.9 percent in the second quarter, following by a 9.4 percent slump in the three months through September.
“We doubt that Russia’s GDP will resume growth without a continuing rise in exports,’ Natalia Orlova, chief economist at Alfa Bank, said in an e-mailed report on Oct. 23. “Until the lack of investment is addressed, we believe there is a high risk that output will remain stagnant.”
Stagnation
The country emerged from recession in the three months ended September, Finance Minister Alexei Kudrin said on Oct. 20. Output grew 0.6 percent in the period from the previous three months, the Economy Ministry said.
While rising exports boosted sectors such as metals production, Russia in September posted annual declines in construction, capital investment, real disposable income and retail sales. The metals sector is close to reaching full capacity and may not expand further, according to Alfa.
“We believe the economic data are more indicative of stagnation,” Orlova said. “The government’s view is based on the recovery in export-focused sectors; however, domestic sources of growth are still fragile.”
Bank Rossii’s rate cuts have failed to boost lending so far. Banks have continued to reduce the size of their loan books as they use their funds to repay emergency financing extended earlier by the central bank, Orlova said.
Companies have cut jobs to adjust to continued tight credit conditions and as they factor in the prospect of a slow recovery in export demand. The jobless rate remains “a clear challenge,” President Dmitry Medvedev said last month. Unemployment stood at 7.6 percent in September.
The International Monetary Fund is advising officials around the world not to withdraw economic stimulus programs too early. The risk of a double recession “is small, but it’s not impossible,” Dominique Strauss-Kahn, the Washington-based organization’s managing director, said on Oct 23.
To contact the reporter on this story: Alex Nicholson in Moscow at anicholson6@.
Last Updated: November 2, 2009 00:00 EST
RBC: Real economy not to benefit from rate cut, experts say
RBC, 02.11.2009, Moscow 10:24:02.The Bank of Russia's move to cut the discount rate would not have any tangible effect on the real economy, experts at the center for economic research of the Institute for Globalization and Social Movements have concluded after considering its possible impact on the economic situation. The decision to lower the rate to 9.5 percent may benefit slightly small and medium-sized Russian banks. On the whole, however, such an insignificant rate cut cannot provide a sufficient impetus for banks to lend to marginally profitable industries. The institute warned that a new decline in the economic situation should be anticipated as early as the end of 2009.
The urge to ensure a steady inflow of credit to the real sector has been cited as an official reason behind the move. Experts believe, however, that the authorities do not actually have such ambitious goals, and are aiming simply to support the mining industry and banks related to it. The government has been forced to make the move, since the situation requires that not only large banks receive loans. The discount rate, however, remains too high to fuel the domestic industry.
In August-October 2009, consumer demand dropped significantly, which in turn defused inflation. The overall living standard deteriorated. For banks, lower domestic sales mean the risk of rapid accumulation of bad debts. From this angle, the rate cut is nothing more than an effort to stave off another banking crisis, though the problems in the real economy could soon force the Bank of Russia bring the rate even lower.
Reuters: Russia should dissuade banks getting big - cbanker
Mon Nov 2, 2009 12:14pm IST
MOSCOW, Nov 2 (Reuters) - Russia must discourage banks from becoming too big, possibly by applying tougher rules on capital and reserves, the central bank's first deputy chairman Alexei Ulyukayev was quoted as saying on Monday.
Russia has over 1,000 banks, but the top five -- led by state-controlled Sberbank (SBER03.MM: Quote, Profile, Research) and VTB (VTBR.MM: Quote, Profile, Research) -- account for nearly half of the sector's assets, having seen their share grow during the crisis as people got worried about the possibility of failure of small lenders. "When I say 'too big too fail', it is exclusively in the negative sense. We should de-stimulate banks from trying to become so big," Ulyukayev told Itogi magazine in an interview.
"Possibly for them there should be special rules on capital, on reserves. Tougher than for others. On the one hand that would reduce the stimulus for imprudent expansion, and on the other hand the reserves will be bigger than at other organisations and in case of unpleasantness they would need less state support."
Ulyukayev added that so far no decisions have been taken on the issue.
He also reiterated that bad loans in Russia's banking system -- hit by the country's first recession in a decade and a devaluation of the rouble in late 2008-early 2009 -- would likely reach 10 percent by the end of this year.
"It is of course a significant problem for each separate bank, but not for the banking system as a whole," he said. (Writing by Toni Vorobyova; Editing by Hans Peters)
Russia Today: Mooted Russian gold sales in support of local companies and budget
31 October, 2009, 17:24
The Russian government this week announced it was thinking of selling 25 tons of gold from its reserves. But while prices for bullion are at record highs, is it the right time to be selling?
As gold prices have hit a record high in recent days, it could be there's no better time to sell gold. Yet, with the dollar weakening, many countries are moving in the opposite direction according to Marat Gabitov, Mining and Metals Analyst at Unicredit, building up their reserves, while slowly moving away from volatile currency holdings.
“Most governments are now buying gold, especially China and other developing countries. Now there are a lot of worries around the future of dollar, and gold is apparently a hard asset which will help preserve international assets of Russia.”
However, Chris Weafer, Chief Strategist at Uralsib believes that the Finance Ministry’s decision to sell gold is not primarily meant to help ease the current budget deficit, but rather to generate new cash to support local industries.
“One explanation is they are simply looking to raise money from selling some gold to do that – the more likely reason though is that the agency responsible for gold holdings, for buying precious metals has been more actively engaged in supporting another state company – Alrosa – which is the world’s second largest diamond producer and they’ve been buying diamonds from that company to support the company while the international market is weak.”
Deputy Finance Minister Dmitry Pankin recently announced that Russia would be issuing $17.8 billion worth of Eurobonds to help cover the budget deficit. Supporting local industries may be the reason for the sale – but ultimately it's unclear where this extra revenue is meant to go.
However, analysts agree, if the government goes through with the sale, it will not be a trend for the future and it will soon look to replenish its gold reserves.
Business, Energy or Environmental regulations or discussions
Reuters: Russian banks' loan portfolios shrink in Sept
Mon Nov 2, 2009 3:26am EST
MOSCOW, Nov 2 (Reuters) - Russia's banks cut lending to companies and individuals in September, data showed on Monday, suggesting that the sector -- worried by rising bad loans -- is not heeding officials' calls to loan more to the real economy. Banks' assets fell for the first time in four months, according to the central bank, suggesting that problems remain. The sector has been hit hard by Russia's first recession in a decade and a devaluation of the rouble in late 2008-early 2009, which saw consumers taking money out of banks and companies becoming less able to pay back debts.
Russia's government has called on banks to help the economy out of recession with loans, and the central bank has cut rates by 350 basis points since April in a bid to encourage commercial lenders to pass the cuts onto the end-borrowers.
But in September the total loan portfolio to non-financial companies shrank 0.7 percent, and to retail clients by 1.1 percent, reflecting a trend seen for much of the year. "The credit giving is not recovering. It is virtually not growing at most banks," the central bank's First Deputy Chairman Gennady Melikyan said on Monday.
"Many are going away from direct credit giving and are buying bonds," he said, adding that banks' bond holdings have grown by around 7 percent in each of the past two months.
Russian companies have taken advantage of a revival in domestic and international debt markets by placing bonds.
Banks' capital rose 6.5 percent, although assets fell 0.5 percent, the data showed.
Of the nearly 1,100 banks in Russia, the top five -- led by state-controlled Sberbank (SBER03.MM: Quote, Profile, Research, Stock Buzz) and VTB (VTBR.MM: Quote, Profile, Research, Stock Buzz) -- account for 48.4 percent of the sector's assets.
Their share has increased from 42.3 percent at the start of the year, as people became worried about the possibility of failure of small lenders at the height of the crisis. But the figure has stabilised in recent months, suggesting confidence is returning.
Bad loans across the sector stood at 961.6 billion roubles ($33.11 billion) on Oct.1, or around 4.8 percent of the loan portfolio -- broadly unchanged from the previous month. (Reporting by Dmitry Sergeyev; Writing by Toni Vorobyova; Editing by David Cowell)
NOVEMBER 2, 2009
WSJ: Avtovaz Bumps Up Against Kremlin
Barred From Layoffs, Car Maker Slashes Pay and Urges Retirements
By WILL BLAND
TOGLIATTI, Russia—With mass layoffs off limits politically, struggling auto giant OAO Avtovaz quietly is trimming its bloated payroll by cutting pay and pushing staff to retire, workers say.
"In our department, on average about a hundred people are leaving a week," says Vladimir Novikov, deputy head of personnel on the assembly lines where a quarter of the company's 96,000 employees work. "Some are finding new jobs, and of course, a lot of them are pensioners."
The situation at Avtovaz, controlled by a Russian state company and 25%-owned by Renault SA, is being repeated across industrial Russia as the need to slash costs in the economic crisis clashes with a Kremlin political imperative to limit layoffs in cities with few other jobs.
For Avtovaz, the country's largest auto maker and the main employer in this Volga River region, a 25 billion ruble, or roughly $860 million, government bailout this spring hasn't been enough to keep the company from the verge of bankruptcy.
Sales are down 44% from last year and top executives have said they need to cut 27,000 jobs, almost a third of the total work force, to become even marginally competitive.
But government officials have rejected calls for extensive job cuts, insisting that layoffs be limited. After Chief Executive Igor Komarov in September mentioned the 27,000-jobs figure, Russian First Deputy Prime Minister Igor Shuvalov raced to Togliatti to reassure workers that any plans to cut that many jobs were "lies."
Nonetheless, the company is moving workers toward the exit, cutting typical monthly salaries to 8,000 rubles, roughly $275, from around 20,000 rubles a year ago, according to an Avtovaz executive.
"When pay is so low, many quit without being formally asked to leave," says Pyotr Zolotaryov, head of the car maker's independent union. He says the reduced compensation isn't enough to live on.
Avtovaz told workers they would receive larger pensions if they left before the end of October, but the company denies that it is pressuring people to leave.
It says staff will be paid more starting in December.
When Avtovaz ran out of cash in the spring, the government provided 25 billion rubles in interest-free loans, but those funds largely were used to pay suppliers.
The company now wants 50 billion rubles more to help repay state banks.
As part of its restructuring plan, Avtovaz aims to cut production next year to half last year's level.
It plans to add models in later years, including several based on Renault and Nissan Motor Co. designs and bearing those company's brands. But Avtovaz shareholders haven't agreed on who will pay for the new models.
Avtovaz employs a quarter of Togliatti's work force and the company's tax payments account for more than half the city's budget.
"Togliatti is one of several cities where the biggest employer has a liquidity problem and must either fire people or receive state support," says Dmitry Zharinov, a senior city official.
"There are no jobs for these people at the moment.…We need time to create them," says Sergei Andreev, who represents Togliatti in the regional assembly.
The government is paying underemployed workers to perform what it calls "social works," such as picking up trash and sweeping leaves.
Officially, Togliatti's unemployment rate is 2.8%, but that figure underestimates the number of people out of work, says Andrei Smirnov, a former Avtovaz worker who says many people "don't want to wait two or three days in a queue" to register as unemployed.
The latest idea is to create a "technopark" in Togliatti, buoyed by government subsidies and tax exemptions. Under the plan, some of Avtovaz's redundant workers could be re-employed to make toy cars, according to Russian media reports.
Write to Will Bland at william.bland@
RBC: Federal Grid company posts drop in Q3 net profit
RBC, 02.11.2009, Moscow 10:49:59.The net profit of the Federal Grid Company under RAS shrank 13.8 percent to RUB 3.959bn (approx. USD 136m) in the third quarter of 2009 compared to the previous quarter, the Russian energy company reported in official documents today.
Steel Guru: Russian railways could increase 2009 budget
Monday, 02 Nov 2009
Interfax cited Mr Valentin Gapanovich the rail monopoly's senior VP as saying that directors at Russian Railways will discuss adjustments to the 2009 budget and 2010 investment program at a meeting on Friday.
Mr Gapanovich said "Amendments to the 2009 budget, including where this concerns the acquisition of rolling stock, will not be extensive. We'll be increasing the 2010 figures, if these are approved. Not much, but the investment program will be bigger than in 2009, including for rolling stock."
Mr Gapanovich said rolling stock purchases might be increased by 15 units in 2010. The total amounts to RUB 1.2 billion. He said that "We had three options for the investment program, positive, negative and optimistic. It looks like ultimately we will be closer to the optimistic, noting that the positive option called for investment totaling RUB 252 billion.”
He added that Federal Passenger Company has been formed as a separate company, it will decide on purchases particularly from Tver Carriage Plant.
As for the 2010 investment program, the maximal size of the investment program has been proposed. The money might be allocated to maintain infrastructure and to increase orders from transportation equipment makers.
(Sourced from Interfax)
RBC: Russian Railways looks to boost investment program by 10%
RBC, 02.11.2009, Moscow 11:56:30.The board of directors of Russian Railways has made a decision to request government approval of its investment program for 2010 in the amount of nearly RUB 277bn (approx. USD 9.53bn), about 10 percent greater than this year's investment program and almost 30 percent less than in 2008, the RBC Daily newspaper reported today.
A source close to the company's board of directors told the newspaper that both the investment program and the financial plan for 2010 would be revised and submitted to the government for approval in the near future. Russian Railways also plans to make an IPO for two of its subsidiaries - TransContainer and Freight One, subject to favorable market conditions. Meanwhile, the company hopes to receive the same amount of support funds - RUB 50bn (approx. USD 1.72bn).
Steel Guru: Rusal hit by USD 6 billion losses
Monday, 02 Nov 2009
AFP reported that Russian aluminum giant UC Rusal suffered USD 6 billion loss in 2008 due the global economic crisis according to a presentation ahead of its planned share listing in Hong Kong and Paris.
The Vedomosti daily said that Rusal announced the 2008 net loss of USD 5.98 billion in a presentation to analysts from investment banks who plan to take part in its Initial Public Offering. The IPO which has so far not been officially confirmed by the company would be the most significant such listing by a Russian firm since the onset last year of the financial crisis.
According to Vedomosti, the company made a net loss of USD 720 million in the H1 of 2009. It said that revenues at Rusal had remained robust, reaching USD 15.68 billion in 2008 and that most of its losses stemmed from write downs on assets.
Most importantly, its 25% stake in the world's biggest nickel producer Norilsk Nickel acquired in April 2008 just before the financial crisis broke is now only worth a fifth of what it was. The majority shareholder in Rusal is Russia's former richest man Mr Oleg Deripaska who owns almost 57% while the current richest man Mikhail Prokhorov has a 14% stake.
Vedomosti said that the IPO would involve 10% of the company's capital and the proceeds would be used exclusively to eradicate its debts.
According to media reports, Rusal plans to list simultaneously on the Hong Kong Stock Exchange and the Paris bourse, part of the pan European stock exchange Euronext but not in Russia. The economic crisis has left Rusal billions of dollars in debt and it has been in complex talks with its creditor banks to restructure the debts.
(Sourced from AFP)
Reuters: UPDATE 1-RUSAL in 1.68 mln t China aluminium supply deal
11.02.09, 03:21 AM EST
By Polly Yam and Toni Vorobyova
HONG KONG, Nov 2 (Reuters) - The world's top aluminium producer, Russia's UC RUSAL, has struck a contract to sell 1.68 million tonnes to Chinese state defence firm NORINCO in 2010-2016, the Russian firm said on Monday.
A source at the Chinese firm, officially known as China North Industries Corporation (NORINCO), said the deal meant RUSAL would supply 20,000 tonnes of aluminium a month to Shanghai for sale on the spot market.
He said pricing had yet to be finalised, although RUSAL denied this.
'RUSAL and Norinco have agreed the price and all other terms and conditions of the aluminium delivery,' the Russian firm said in a statement emailed to Reuters.
RUSAL is urgently trying to reach agreement with foreign creditors on $7.3 billion of debt by mid-November to pave the way for a Hong Kong share listing that would help pay off debt, senior bankers said last week.
The NORINCO source said the firms were still in talks on prices.
'We have signed the contract confirming the quantity. We are still talking on details and prices,' said the source, who is familiar with the deal. 'The payment may involve trade finance.'
He added that trade finance could include a lump sum payment for the whole 1.68 million tonnes of primary aluminium in advance.
An advance lump sum payment for the entire volume, based on today's aluminium prices at $1,911, would equal $3.21 billion, a Reuters calculation showed.
RUSAL's main owner is Oleg Deripaska, once Russia's richest man and now its most indebted tycoon.
'This agreement represents a significant step towards achieving our strategic objective of increasing exposure to the Chinese market,' RUSAL's corporate strategy director, Artem Volynets, said in a statement.
The company expects to double China sales from 5 percent of its revenue in 2009 to 10 percent by 2015.
The deal was suggested by the Russian government during Russian Prime Minister Vladimir's visit to Beijing last month.
'The deal is not only a supply contract but also a government-government one,' he said.
(Reporting by Polly Yam; Editing by Jonathan Hopfner and Clarence Fernandez)
((polly.yam@; +852 2843 6933; Reuters Messaging: polly.yam.@)) Keywords: RUSAL NORINCO/
Market Watch: Rusal signs supply contract with Chinese firm
Nov. 2, 2009, 2:39 a.m. EST
By Polya Lesova
FRANKFURT (MarketWatch) -- Rusal, the world's largest producer of aluminum, said Monday it signed a contract to supply 1.68 million tons of aluminum to China North Industries Corporation (Norinco), one of China's largest diversified corporations, between 2010 and 2016. Rusal said its sales to China are expected to represent 5% of its revenue in 2009, with the company aiming to increase this to 10% of revenue by 2015. Norinco's executive Xu Yuping said his company believes the contract with Rusal will help foster "the rapidly growing economic ties between Russia and China, strongly encouraged by the leadership of both countries." Rusal, a privately held company controlled by Russian oligarch Oleg Deripaska, is currently trying to restructure several billion dollars worth of debt to foreign lenders.
Bloomberg: Rusal Offers to Invest in Power Plant Upgrade, Vedomosti Says
By Yuriy Humber
Nov. 2 (Bloomberg) -- Oleg Deripaska, the controlling owner of United Co. Rusal, has offered to help repair and upgrade the Maynskaya hydropower plant in Siberia in exchange for lower- priced power supplies, Vedomosti said.
Rusal is prepared to spend $10 million on the plant to help boost capacity to 321 megawatts from 220 megawatts in return for electricity at cost, the newspaper said, citing a letter from Deripaska to the Energy Ministry and unidentified people familiar with the matter.
Rusal paid 670 rubles ($23) per megawatt hour of electricity in the first half of this year, while Maynskaya can produce power for 380 rubles per megawatt hour, the newspaper said, citing Sergei Pikin, head of the Energy Development Fund.
To contact the reporter on this story: Yuriy Humber in Moscow at yhumber@
Last Updated: November 2, 2009 01:17 EST
Alfa: Deripaska proposes that Rusal should finance the modernization of RusHydro's Mainskaya GES
Alfa, Russia
Monday, November 2, 2009
According to Vedomosti, Oleg Deripaska, the owner of UC Rusal, sent a letter to Sergei Shmatko, Russia's Energy Minister, in which he proposes to modernize RusHydro's Mainskaya GES at the expense of UC Rusal. He argues that the station's operations suffer from inefficient equipment: the installed capacity is 321 MW, but the working capacity does not exceed 220 MW. Reconstruction of the station's turbines would make a considerable increase in the load factor possible and help to close the gap between the installed and working capacities.
Mainskaya GES (321 MW) is located near the Sayano-Shushenskaya GES on the Yenisei River, and operates in tandem with the latter station. While the Sayano-Shushenskaya GES was shut down after the accident in August, the Mainskaya GES continues to operate, supplying electricity to Rusal's Sayanogorsky and Khakassky aluminum smelters.
UC Rusal is ready to spend $10m of its own funds to modernize the station, but in exchange it asks the government to allow Rusal to purchase the additional volumes of electricity coming from the modernization at the price equal to the production costs.
Although the modernization of the Mainskaya GES could potentially benefit RusHydro's minorities, it will likely have no impact on the company's value if the extra electricity is sold at zero profit to Rusal. Given this caveat, and a lack of clarity over the state's position in regards to the proposal, we regard the news as NEUTRAL for the stock.
Alexander Kornilov
NOVEMBER 2, 2009
WSJ: Alfa Wants to Realign Assets
After Pact With Telenor, Altimo Unit Floats Idea to Merge Other Stakes
By GREGORY L. WHITE
Last month, Russia's Alfa Group ended five years of bitter legal battles with Norway's Telenor ASA with a deal to merge their telecom holdings in Russia and Ukraine. Now, the Russian company is setting its sights on another potential megadeal for its other telecom assets.
Alexei Reznikovich, chief executive of Alfa's telecoms unit, Altimo, said in an interview that the group would like to combine its minority stakes in Russian mobile operator OAO Megafon and Turkey's Turkcell AS into a single company. Sweden's TeliaSonera AB, now a shareholder in both Megafon and Turkcell, would get a minority stake alongside Alfa and other shareholders, he said.
"This is definitely the next thing we need to work on," he said, noting the group hasn't held any formal talks on the issue.
The deal with Telenor covers only about half of Altimo's $20 billion in telecoms assets, leaving Megafon and Turkcell, Mr. Reznikovich said. He said a combination of Megafon, which is the No. 3 player in Russia, and Turkcell, with operations in Turkey, Ukraine and other countries in the region, would create a company that could be worth about $30 billion, and as much as $50 billion when international markets recover.
Telia owns stakes in both groups, though it is fighting legal battles over some of its holding in Turkcell.
The apparent simplicity of Mr. Reznikovich's idea for Megafon and Turkcell belies the knot of interests that would have to be untangled for it to happen, however. Much of Alfa's stake in NYSE-listed Turkcell has been the subject of years of litigation with Turkey's Cukurova Group, as well as Telia. Megafon's other shareholders, meanwhile, have different visions than Alfa, which holds a 25% stake.
"The business logic should prevail, but when it will prevail I don't know," Mr. Reznikovich said.
Alfa, a group controlled by billionaire Mikhail Fridman that spans banking, oil, retail and telecoms, has for years prospered from complicated situations and rivalries. The group has never shied from conflict, as in the case of BP PLC, which agreed to renegotiate the terms of their oil joint venture last year after a wave of regulatory pressure forced the BP-backed CEO to flee Russia.
Under the agreement to end their five-year legal battle, Alfa and Telenor will merge their holdings in Russia and Ukraine into a Netherlands-headquartered company to be called Vimpelcom Ltd. that is to be one of the largest mobile-telephone companies in the emerging world.
Neither side will have control over the new company, which will be listed in the U.S.
The deal, be completed early next year, would be the first major result for a strategy Mr. Fridman outlined four years ago of converting Alfa's scattered telecoms holdings into a major operator.
Telia said the group hasn't discussed any combination with Alfa and remains focused on attaining control in its holdings, although Russian law would likely block a foreign company from controlling Megafon.
Alfa, meanwhile, was forced to reduce its Turkcell stake by a U.S. court order in the battle with Telenor, but Mr. Reznikovich said he hopes the group can buy it back.
Alfa is also fighting with Cukurova over part of its stake, with court rulings expected next year.
Adding to the complexity, Megafon's other major shareholder, an investment group controlled by metals tycoon Alisher Usmanov, has shown no interest in a combination.
Some analysts have suggested that Megafon is a more likely partner for OAO Svyazinvest, the Russian state-controlled telecoms company that recently has expressed an interest in expanding its mobile presence. Mr. Reznikovich said he thought such a deal would be "horrendously expensive" and unlikely, however.
Write to Gregory L. White at greg.white@
Reuters: Alfa wants to consolidate MegaFon, Turkcell –paper
Mon Nov 2, 2009 11:52am IST
MOSCOW, Nov 2 (Reuters) - Russia's Alfa Group wants to consolidate its stakes in the country's third-largest wireless operator MegaFon and Turkey's Turkcell (TCELL.IS: Quote, Profile, Research), a senior company official was quoted as saying on Monday.
Last month, Alfa resolved a multi-year dispute with Norway's Telenor (TEL.OL: Quote, Profile, Research), agreeing to merge their Russian and Ukrainian holdings into a $23 billion telecom firm. Now the conglomerate can focus on its other assets. [nL5637811]
"We have two more assets -- a stake in MegaFon and in Turkish operator Turkcell," Alexei Reznikovich, Chief Executive of Alfa's telecoms arm Altimo, told Kommersant business daily in an interview.
"Now our aim is to consolidate these assets also, to create on their basis a Russian telecommunications company of a global standard."
Alfa Group, controlled by Russian billionaire Mikhail Fridman, holds around 4.99 percent in Turkcell and 25.1 percent in MegaFon.
"We do not plan to exit these assets. We are very happy with them. But we will attempt to change the situation in Turkcell and MegaFon in one way or another," Reznikovich said.
"We need to understand what can be done with our stakes...in order to give a maximum increase in value."
(Writing by Toni Vorobyova; Editing by Jon Loades-Carter)
((antonina.vorobyova@; Tel: +7495 7751242, Reuters Messaging: antonina.vorobyova.@)) Keywords: TURKCELL MEGAFON/
The Independent: Barclays and HSBC march on Moscow
BarCap boss putting 'considerable' money to work in Russia
By Jason Corcoran in Moscow
Monday, 2 November 2009
Banking giant Barclays is spearheading a new British invasion of Russia’s high street, according to one of its most senior bankers, as relations between the two countries bounce back from last year’s low point.
Barclays, as well as rival HSBC, have become increasingly visible across central Moscow with new branches and high-profile advertising as part of a move to aggressively expand in Russia’s major cities.
Hans-Joerg Rudloff, chairman of Barclays Russia and the investment banking arm Barclays Capital, said the group was making significant capital and trading commitments to Russia in light of an improving investment climate.
He said: “The battle against the command economy has been won and there are signs that ongoing reform will be favourable for the investment community and that is part of the reason I am putting considerable amounts of money to work in Russia.” Barclays has 36 branches across the country and is expanding its operations to offer full-service retail banking from previously offering support mainly to small and medium enterprises. Stuart Lawson, head of HSBC Russia said last month that the group would be “aggressive” in expanding its existing four branches in Moscow and one in St Petersburg.
A year ago, British firms were afraid they might become outcasts in Moscow following a dispute at Anglo-Russian joint energy venture TNK-BP, the closure of the British Council’s offices in Russia and the Kremlin’s refusal to extradite Andrei Lugovoi, the chief suspect in the London killing of dissident Alexander Litvinenko. Diplomatic relations between the two Governments sank to their lowest point since the Cold War but the economic crisis and the need for foreign investment stimulus has since helped to paper over political differences.
Mr Rudloff said BarCap, which lost £250m after Russia’s sovereign default in 1998, would also help build a domestic capital market. He added: “Right now, we are entering a phase where everything seems to go on green light. It is evident that Russia is now making huge strides to move forward, be responsive and get things going. It’s a big offensive directed at foreign investment and will undoubtedly lure investors into the market.”
Barclays, which acquired local player Expobank last year for $745m, has recently hired two senior financiers on the ground to build their businesses.
Nikolai Tsekhomsky joined from state bank VTB last month to head up Barclays retail and commercial banking business. American Bob Foresman,the former deputy chairman of Russia’s Renaissance Capital, will start work as Barclays country manager on December 1. He will be responsible for building investment banking on the ground as well as the launch of a new local asset management business to cater to Russia’s wealthy.
HSBC, which already has corporate and investment banking interests in the country, is spending $200m rolling out a retail and private banking network. Royal Bank of Scotland’s blue and white livery has also surfaced in Russia thanks to its acquisition of Dutch Bank ABN AMRO’s operations. Mr Lawson believes the UK banks offer a better service than domestic rivals. He said: “In addition to providing conduits for Russian corporates to access international debt markets, foreign banks are helpful to the Russian market as they import innovative products and also provide sources of training for Russian bankers.”
Foreign banks burnt by Russia’s sovereign default in 1998 turned off the taps to international credit in the aftermath of the current economic crisis. The banks are reluctant to open new lines of credit until oligarchs agree to painful debt restructuring of $437bn (£265m) in foreign debt.
BarCap has billions of debt in the Russian public sector although virtually no exposure to the troubled private sector. Railway monopoly RZD repaid $1.5bn late last year.
A lack of regulation of Russia’s local bond market have resulted in over 100 defaults since the crisis hit. Bondholders, who have very limited statutory rights, have in some cases accused issuers of ducking their responsibilities and stripping assets.
Eric Kraus, a strategist with investment bank Otkritie: said: “By allowing the bond holders to be robbed outright, the financial regulators have ensured that no second or third-tier company will be able to raise finance again.”
Rudloff would like to see tougher regulation and the establishment of arbitrage courts to resolve disputes. He said: "There should be a review of the bankruptcy procedures. That would be one of the most important measures to establish clear procedures if a default occurs."
Rudloff, who sits on the board of oil giant Rosneft, stepped down from the Russian media company RBC due to a conflict of interest over $18 million (£11m) in debt owed to him and his friends.
RBC, which may yet be acquired by Russia’s richest oligarch Mikhail Prokhorov, has offered creditors to restructure half its debt and asked them to accept a 64% discount on the remainder.
Rudloff’s own family office has operated in Russia since 1995. As chief executive of Credit Suisse First Boston in the early 1990s, he sent bankers Stephen Jennings and Boris Jordan to Russia to scout for deals. The pair became involved in the state's pilot voucher auctions and soon left to set up investment bank Renaissance Capital.
NOVEMBER 2, 2009
eWeek Europe: Russia Waits On EC For Sun Oracle Deal Approval
• November 2, 2009
• By Chris Preimesberger
Oracle withdraws its petition to obtain antitrust clearance to do business in Russia after its acquisition of Sun Microsystems
The European Commission's roadblock slowing the Oracle acquisition of Sun Microsystems has led to another international problem for the world's second-largest software company.
Oracle on Oct. 30 withdrew its petition to obtain antitrust clearance to do business in Russia after the addition of Sun, following the planned completion of the $7.4 billion (£4.5bn) deal announced last April.
The Federal Antimonopoly Service of Russia requires that once it is notified of a merger or acquisition that may infringe upon antitrust laws, the companies involved have a maximum of 90 working days to complete the deal. Oracle does not believe the acquisition will be sanctioned by EC regulators within the 90-day window.
Here is an English translation of the Russian government document describing the Oracle withdrawal.
Oracle, which, like any U.S. company, is legally limited in what it can say during a pending acquisition, did not return an eWEEK e-mail request for comment on 30 Oct.
The EC, which is the antitrust arm of the European Union, has been withholding blessing of the deal until it is satisfied that a key component in the Sun product line, the popular open-source MySQL database, will be allowed to innovate and compete fairly in the IT marketplace. The Wall Street Journal reported on 30 Oct based on sources of its own that the "Russian authorities want to see how Europe is going to deal with the issue first."
Oracle was informed that it either had to withdraw its notification or face a blocking decision from the Russians. So it chose to withdraw. The company can always resubmit its petition to Russia at a later date. It remains to be seen how the action will affect the entire acquisition.
Oracle has applied for antitrust clearance in a number of international jurisdictions, including China, Japan and India. The U.S. Department of Justice was the first to clear the deal back on 20 Aug.
MySQL, which claims more than 6 million working installations, is heavily relied upon in the data centers of Web 2.0 companies such as Google, Yahoo and and also has a loyal following in the small and midsize business markets. It was founded by Swedish and Finnish developers and is one of the biggest European IT success stories of the last 20 years.
Oracle has been questioned hard and often about its plans for MySQL, which Sun bought for $1 billion in January 2008. A number of industry experts and at least two database development communities are concerned that Oracle, which makes most of its profits selling and maintaining expensive parallel database licenses, will give short shrift to the freely available MySQL and ultimately squelch its loyal international development community.
Oracle has stated several times that it sees MySQL as a complementary offering inside its product line, that MySQL does not compete directly with Oracle's own databases, and that Oracle will continue to invest in MySQL's R&D.
Former EC business adviser and MySQL investor and adviser Florian Mueller told eWEEK 26 Oct that "Oracle is a high-priced cash cow in the parallel database business. Why then should it be the one entity that controls development, determines revenues and controls an R&D budget of a competing product that it sells against directly in the database market?
"It is legally possible but not viable [for Oracle] to be an innovative competitive force [while owning MySQL]."
Oracle CEO and founder Larry Ellison doesn't see it this way, saying at the recent Oracle OpenWorld conference in San Francisco, "MySQL in no way competes with our databases. It has its own market and following. The main competitor is Microsoft [SQL Server], and that's OK by us."
Most industry analysts contacted by eWEEK say they believe the Sun acquisition ultimately will earn the European Commission's blessing and Oracle will be allowed to do business in the 27-nation European Union. But the deal also is proving to be a nagging headache for both Oracle and EC regulators, who are not happy about a European-created IT product, MySQL, coming under the control of a proprietary database company
Ellison said in a recent Silicon Valley public appearance that Sun is losing about $100 million per month and that Oracle needs to close the deal as rapidly as possible to stop the flow of financial red ink.
Barentsobserver: Reinertsen to expand in Murmansk
2009-11-02
Having secured a 400 million NOK contract on parts to a testcenter for CO2 capture in Norway, the Norwegian engineering company Reinertsen plans to expand and develop their services in Murmansk.
The Russian branch of the company Reinertsen NWR will expand with 100-150 new employees in Murmansk during the coming year, a press release from the company reads. Reinertsen NWR opened in 2005.
Reinertsen says the expansion in Murmansk is an important step in the preparation to take a major role in the Shtokman development project.
In 2008 The Murmansk branch of Reinertsen built an underwater module for StatoilHydro’s “Sigrid” project in the Norwegian Sea, as BarentsObserver reported.
Director of Reinertsen, Torkild Reinertsen, earlier this year became the first foreign board member in Murmanshelf, the association of oil- and gas suppliers in Murmansk Oblast and Northwest Russia.The association includes about 200 companies.
The 400 million NOK contract that Reinertsen has secured, concerns fabrication and installation of parts of a testcenter for CO2 capture that Technology Center Mongstad plans to construct. The partners in TCM are Gassnova, StatoilHydro and Norske Shell.
Technology Center Mongstad is the largest test facility of its kind in the world, with an annual capacity to handle up to 100000 tons of CO2. The experience gained by the operation of the technology center will in turn form the basis for a full-scale facility.
Trading Markets: ArcelorMittal to continue mining coal in Siberia
Mon. November 02, 2009; Posted: 04:33 AM
Vinay Shukla Moscow, Aug 05, 2009 (Asia Pulse Data Source via COMTEX) -- MT | Quote | Chart | News | PowerRating -- Transnational steel giant ArcelorMittal will continue mining coal in Siberia and will not lay off any miners.
An agreement to this effect has been reached between the company and the regional government of Russia's coal mining region of Kemerovo in Western Siberia.
According to the agreement, ArcelorMittal will invest in the modernisation of the Pervomaiskaya mines to keep it running in accordance with the local environmental and labour laws.
The local government for its part would ensure the sale of coal produced by ArcelorMittal, ITAR-TASS news agency reported.
ArcelorMittal had planned to close the Pervomaiskaya coal complex and retire the miners. In response, the Kemerovo governor, Amana Tuleyev, had sent an angry telegram to promoter Laxmi Mittal to hand over the control of the mine to the government and warned that the license for the exploration and mining of a new prospective coal deposit would be cancelled.
For full details on Arcelor Mittal (MT) click here. Arcelor Mittal (MT) has Short Term PowerRatings of 6. Details on Arcelor Mittal (MT) Short Term PowerRatings is available at This Link.
Activity in the Oil and Gas sector (including regulatory)
Upstreamonline: Russia sees boost in output
Wire service
Russia’s gas output rose over 15% to 1.76 billion cubic metres in October, according to data released by the Energy Ministry.
Crude production set a new record of over 10 million barrels per day, Reuters reported today.
Pipeline oil exports rose 3.4% to 4.24 million bpd from 4.1 million bpd in September.
State-owned Gazprom produced 1.45 billion cubic metres per day of gas in October, up from 1.20 bcm per day in September 2009 but down by 1.4% down from 1.47 bcm in October 2008.
Gazprom has not fully recovered from the economic downturn and pricing row with Kiev last January when Europe was cut off from Russia's gas supplies through Ukraine for almost two weeks, according to Reuters.
On Sunday, Russian Prime minister Vladimir Putin warned the European Union president Sweden of a possible new gas crisis due to problems over energy payments from Ukraine.
Gazprom says it will take a few years to return to the levels of gas consumption seen prior to the financial crisis.
Monday, 02 November, 2009, 07:50 GMT | last updated: Monday, 02 November, 2009, 07:57 GMT
Reuters: Putin warns EU of possible gas disruption
Mon Nov 2, 2009 6:20am GMT
MOSCOW (Reuters) - Russia has warned EU president Sweden of possible disruption to natural gas supplies to European consumers because of problems with main transit nation Ukraine over energy payments, Interfax news agency reported.
Russian Prime Minister Vladimir Putin raised the issue in a telephone conversation with his Swedish counterpart Fredrik Reinfeldt, whose country holds the European Union's rotating presidency, Interfax said late on Sunday.
"During the conversation, Putin drew the attention of the EU leadership to signals, including those received via official channels from Kiev, of possible problems with payments for Russian gas supplies," it said, quoting Putin's press service.
"As Putin stressed, as a result of all this, 'problems with Russian gas transits across Ukraine's territory aimed for European consumers could arise'."
Russia cut gas supplies to western Europe via Ukraine in January 2006 and again in January this year during disputes with the former Soviet republic over gas prices and payments. Supplies to EU customers were disrupted in the middle of winter.
Last Friday, in a telephone talk with Ukrainian counterpart Yulia Tymoshenko, Putin accused Ukrainian President Viktor Yushchenko of risking to provoke a new gas crisis in Europe.
Tymoshenko is Yushchenko's main political foe and a frontrunner for a January 17 presidential election.
Diplomats have said Russia may be wary of entering a new gas dispute with Kiev on the eve of the vote, which Moscow hopes will bring a more pro-Russian president to power.
Ukraine's deep economic crisis has raised fears about its ability to pay for Russian gas.
(Reporting by Dmitry Solovyov)
PR Newswire: Platts to Launch Russian Pricing Reference for New Asia-Bound Oil Starting Mid-December
MOSCOW, November 2 /PRNewswire/ --
Platts, the energy information division of The McGraw-Hill Companies, plans to launch a price assessment for the new Russian crude oil which is slated to start flowing to Asian markets on December 16. The new crude stream, East Siberian Pipeline Oil (ESPO), will be exported from the port of Kuzmino near Vladivostok in Russia's Far East at an initial rate of 300,000 barrels per day.
Platts, a leading global oil information provider with a 100-year history of assessing physical energy and metals prices, has been working closely with Russian energy ministry officials and producers in the planning of this new crude assessment and will provide transparent price discovery for the new oil stream.
"We've been holding discussions with the Russian authorities and producers for over a year and we plan to publish a new price assessment as soon as the shipments begin," said Jorge Montepeque, Platts Global Editorial Director for Markets. "The Asian markets are heavily dependent on imported oil and the role of Russian oil has been growing in recent years. The Eastern Siberian Pacific Ocean pipeline will enable supplies from the Eastern Siberian fields to supply some of the rapidly growing energy needs in Asia."
Platts estimates that the shipments of the new stream will likely rise to 600,000 barrels/day over the next few years, with a substantial part of East Siberian Pipeline Oil expected to be bound initially for China.
"We view the ESPO project as an important step towards diversifying the outlets for Russia's crude oil market, demonstrating the increasing role that Russian oil plays in the world's supply needs," said Mr. Vitalii Vasilievich Karaganov director of the department of oil and oil products processing at Russia's Ministry of Energy.
"Initially, we expect ESPO pricing to be a differential to commonly used benchmarks such as Platts Dubai and Platts Dated Brent, but due to its location, ample production levels and wide equity ownership, it has the elements that could help it become a major price indicator in Asia," said Montepeque.
Platts Dubai and Platts Dated Brent are recognized by the global oil industry as benchmarks against which other oil grades and refined products are referenced. While many grades of oil and pricing references exist worldwide, benchmark status of an oil or price assessment is determined by industry acceptance and adoption in the open marketplace.
For more information on crude oil, visit the Platts website.
About Platts: Platts, a division of The McGraw-Hill Companies (NYSE: MHP), is a leading global provider of energy and commodities information. With a century of business experience, Platts serves customers across more than 150 countries. An independent provider, Platts serves the oil, natural gas, electricity, emissions, nuclear power, coal, petrochemical, shipping, and metals markets from 17 offices worldwide. Platts' real-time news, pricing, analytical services and conferences help markets operate with transparency and efficiency. Traders, risk managers, analysts, and industry leaders depend upon Platts to help them make better trading and investment decisions. Additional information is available at .
Distributed by PR Newswire on behalf of Platts
Nov 3, 2009
Asia Times Online: Sechin divides the Black Sea
By John Helmer
MOSCOW - Russia's Deputy Prime Minister and energy tsar, Igor Sechin, is attempting to divide the Black Sea with a stroke almost as dramatic as the biblical one with which Moses surprised the Pharaoh at the Red Sea.
If you believe the latter, the former may be credible, despite the refusal of Russian energy policymakers to clarify what they are doing and what they think the commercial logic of the move to be.
For tanker operators, the move threatens to cancel the long-planned crude oil pipeline running from Burgas, on Bulgaria's Black Sea coast, to the Greek Aegean port of Alexandropouli. Instead, Sechin now appears to favor expansion of port capacity at Ceyhan, the Turkish eastern Mediterranean tanker terminal, which will be supplied for the first time with Russian crude. This is to be piped from a new terminal to be built at Samsun, on Turkey's Black Sea coast
So, instead of a tanker shuttle moving westward from Novorossiysk across the Black Sea to the Bulgarian resort city of Burgas, which has been the plan agreed with Bulgaria and Greece until now, Sechin's plan calls for a new southward tanker route to Samsun. Swept away also are plans for Bulgaria to become a hub for storage and shipment of Russian natural gas, along two arms of the proposed South Stream pipeline.
On October 19, at a meeting in Milan with Turkey's Minister of Economics, Taner Yildiz, Sechin announced the new Russian direction for South Stream through Turkish territorial waters. In addition, it was announced that he had agreed to supply Russian crude oil to a new pipeline across Turkey from Samsun to Ceyhan, which the Russian companies, Transneft and Stroytransgas, will help to build.
According to a Russian reporter granted special access to Sechin, the new scheme has been in negotiation with the Turks since Prime Minister Vladimir Putin was in Ankara on August 6. Ahead of Sechin's arrival to meet Yildiz in Milan, Russian officials are reported to have been working out the new scheme, which, in the newspaper report at least, diverts the seabed route of South Stream under the Black Sea by up to 230 kilometers southward to Turkish territorial waters; replaces Bulgaria as Russia's energy transit partner for both oil and gas; and agrees to the Samsun-Ceyhan oil pipeline as a substitute for the Burgas-Alexandroupoli route.
Most industry analysts in Moscow believe that the Samsun-Ceyhan oil pipeline was the condition the Turks imposed in order to give the Russians the go-ahead to lay South Stream on the Turkish sector of the seabed. However, there is no evidence that this is what happened.
Sources in Moscow agree that the routing of the new gas pipeline must skirt the 12-nautical mile (22.2 kilometer) territorial limit of Ukraine to avoid more political trouble with Kiev. However, at the narrowest point between the Ukrainian coastline at the Crimean Peninsula and the Black Sea coast of Turkey, around Inebolou, the sea is 280km wide. Subtracting 12nm (22.2km) for the Ukrainian and Turkish territorial zones leaves a stretch of international water of about 235km. The seabed depth in this area is between 600 meters and 1,200 meters.
This is less than the 1,200m to 2,250m depths which Gazprom's Blue Stream gas pipeline already crosses on the Black Sea seabed between Arkhipo-Osipovka and Durusu. According to Gazprom and the sub-sea pipeline builder Saipem, parts of this route, which started delivering Russian gas to Turkey in 2005, are among the deepest ever used for pipelines.
Sources concede therefore that there is no technical reason why the proposed South Stream must be diverted so far south, out of the international zone, and at a greater distance and project cost. Current estimates for South Stream put the price tag of the entire project at about US$13 billion.
Gazprom, Russia's leading company, has told Asia Times Online that the reports of Sechin's agreement with the Turkish government to reroute the South Stream gas pipeline onto Turkish territory do not mean that Gazprom has decided to lay a land segment of the pipeline in Turkey, and bypass Bulgaria altogether.
But Gazprom is unwilling to rule that option out, or to say what it understands by the Sechin plan. The company's principal spokesman, Sergei Kupriyanov, is not answering questions, adding to the impression that his company's leadership is in disarray over Sechin's moves towards Turkey.
Another Gazprom source told Asia Times Online that Russia had asked Turkey for permission, and received it, to explore the territorial waters of Turkey to find out whether the area was suitable for the pipeline. "If it is suitable, then the pipeline may be laid across Turkish marine territory," the Gazprom source said. "Where it goes next - to Turkey or to Bulgaria or elsewhere - is not decided yet."
The doubt in that last line is challenged by the Bulgarians, who claim they have already signed commitments with Putin to lay South Stream across Bulgarian land territory.
Since 2007, Gazprom's map showing its proposed route for South Stream begins in Dzhubga, near Tuapse port, on the Russian Black Sea coast, and ends at Varna, on the Bulgarian coast. The route passes through international waters well south of the Ukrainian zone, and equally clear of Turkish territorial waters. [1]
Hours after Sechin announced his Black Sea move, embracing his Turkish counterpart Yildiz in the process, Gazprom chief executive Alexei Miller was in Belgrade, Serbia, along with Russian President Dmitry Medvedev, to agree on funding and building the Serbian section of the South Stream project's northern branch; and also to establish a major gas storage in Serbia. The regular news wires reported that Turkey's President Abdullah Gul had telephoned Medvedev there, to inform him of the decision to allow the Russians to survey the Turkish sector of the Black Sea.
"The Turkish president said that the Turkish government had taken all the necessary decisions to give permission for geological and explorative work in Turkey's economic zone of the Black Sea for the South Sea gas pipeline," Reuters quoted a Kremlin statement as explaining.
Note that the "economic zone" referred to in this report may not be the same stretch of seabed as Turkish territorial waters. Turkish Embassy sources in Moscow won't say which Gul's telephone call meant.
The hint from Sechin that he and the Turks will move South Stream away from Bulgaria altogether has produced angry reaction in Sofia, the Bulgarian capital, where the government denies it is losing to Turkey both the gas pipeline and the Burgas-Alexandroupoli crude oil pipeline, which Moscow has been backing for more than a decade - until now.
On October 22, Gazprom announced that Miller had met with Paolo Scaroni, chief executive of Italian gas company Eni, Gazprom's partner in South Stream. But their communique had almost nothing to say about the routing options for the South Stream pipeline. "The plan of further actions connected with building the marine part of the gas pipeline has been considered," Gazprom said of the meeting. Eni spokesman, Filippo Catalini, told Asia Times Online the agreement between Turkey and Russia to allow the route of South Stream to pass through the Turkish EEZ was signed on August 6, 2009, in Ankara. Eni is evidently not endorsing a change of route for South Stream.
Neither is the Bulgarian government. Bulgarian Energy Minister Traycho Traykov flew to Moscow on October 22, where he met his counterpart, Russian Energy Minister Sergey Shmatko. Bulgarian government officials told Asia Times Online they already had a signed agreement with the Russians for the South Stream pipeline to enter Bulgarian territorial waters and come ashore at Varna. How the pipeline is routed through the Black Sea before that has not been decided, they noted, adding that it made no technical or economic sense to reroute the pipeline south into Turkish territorial waters. The Bulgarians also expressed concern with the future of the Burgas-Alexandroupoli oil pipeline, as they conceded there was no commercial future for that, if the Russians decided on Samsun-Ceyhan.
Following his meeting with Traykov, Shmatko announced publicly he now thought of the Turkish pipeline option as "a new rising star ... we want to build a major refinery and jointly sell oil products from the Mediterranean coast".
Professor Alexander Kovalev is an expert on the law of the sea and on Russian maritime law at the Diplomatic Academy of the Russian Ministry of Foreign Affairs. He told Asia Times Online that an international maritime convention of 1982 requires a country laying a pipeline on the continental shelf of another country to coordinate the route between them. But he noted that in Russia there is no constitutional requirement for the Russian government to notify parliament, or apply for its ratification, if agreements are signed on seabed issues, including the Black Sea EEZ borders, or route changes of South Stream.
Deputy Prime Minister Sechin's office did not respond to questions, and he has never addressed parliament to explain what he is doing.
Adding to the confusion which Sechin has set in motion, LUKoil, Russia's second-largest oil producer and exporter, says it has no interest in supplying crude oil for the proposed Samsun to Ceyhan pipeline. Until now, the Kremlin has refused to countenance proposals for Russian crude to be delivered across Turkey, either for refining in country, or for export at Ceyhan, which is the tanker terminal on the eastern Mediterranean for a US-backed crude oil pipeline currently delivering Azeri oil from Caspian fields.
A Rosneft spokesman told Asia Times Online that it was joining the Sechin oil pipeline proposal, along with the Russian pipeline company Transneft, Eni of Italy (which had originated the project in 2005, when there was no Russian crude to fill it), and the Calik Holding of Turkey.
Sechin, who is also chairman of the board at Rosneft, the state-owned lead producer in Russia, claimed in the October 19 announcement that LUKoil was interested in the proposed 555km pipeline to Ceyhan, which will have a 1.5 million barrels per day capacity. LUKoil's statement to Asia Times Online is a categorical denial. Rosneft is equally categorical that it wants to participate.
In 2007, LUKoil tried but failed to get Turkish and Russian government agreement for a new refinery at Zonguldak, on Turkey's Black Sea coast, 400km to the west of Samsun.
Asked if a dramatic change was underway in Russia's oil and gas pipeline strategy, Moscow maritime analyst Alexei Bezborodov said the situation over oil transportation in the Black Sea had now become too complicated to understand or to express an opinion about. Most Gazprom analysts at Moscow's investment banks agree that the Black Sea's waters are now too murky for them to predict what will happen next.
Note
1. For a map of this aspect of the South Stream project, see South Stream website.
John Helmer has been a Moscow-based correspondent since 1989, specializing in the coverage of Russian business.
(Copyright 2009 Asia Times Online (Holdings) Ltd. All rights reserved. Please contact us about sales, syndication and republishing.)
Gazprom
Citibank: Shtokman project to be delayed until 2013?
Citibank, Russia
November 2, 2009
The BoD of Shtokman Development has considered a delay in the launch of the project from 2010 to 2013, Vedomosti reports. The potential delay does not come as a surprise given the dramatic decline in gas demand worldwide. Citi expects gas production of Gazprom to recover to '08 levels only by '15, which means that gas production at the Shtokman project will likely be delayed post '15. We view the news as neutral and priced in for the stock.
Alexander Korneev
Reuters: Gazprom's Oct gas output rises 21 pct from Sept
Mon Nov 2, 2009 12:44am EST
MOSCOW, Nov 2 (Reuters) - Russian gas export monopoly Gazprom's (GAZP.MM: Quote, Profile, Research, Stock Buzz) October gas production rose almost 21 percent from the previous month due to a recovery in demand, Energy Ministry data released on Monday showed.
Russia's oil production stood at a record-high level, above 10 million barrels per day, while the country's October gas output rose by 15.8 percent to 1.76 bcm from 1.52 bcm in the previous month.
Gazprom's October gas output was 1.45 billion cubic metres per day, 20.8 percent up from 1.20 bcm per day in September 2009 but 1.4 percent down from 1.47 bcm in October 2008.
Russian October oil output inched up to 10.04 million barrels per day from 10.01 million bpd in September. (Reporting by Vladimir Soldatkin; Editing by Toni Vorobyova)
New Europe: Gazprom and Naftogaz: Yet another gas war?
Author: Kostis Geropoulos
1 November 2009 - Issue : 858
A conflict between Ukraine and Russia due to the gas prices and transit will not emerge again, if Kiev can help it. “Surely, it will be difficult to do... But Prime Minister Yulia Tymoshenko, as before, is going to do her best, to take every effort so that confidence in Ukraine’s timely payments is kept,” Ukrinform quoted Ukraine’s Deputy Prime Minister Hryhoriy Nemyria as saying.
According to the January 2009 gas contract between Russian gas monopoly Gazprom and Ukraine’s state-owned energy company Naftogaz, the latter should pay for Russian gas by the 7th day of the month following the supply month. Otherwise, Naftogaz will have to make payments for gas in advance.
Tymoshenko and Russian Prime Minister Vladimir Putin verbally agreed in September that Ukraine would pay only for the gas really supplied. However, the contract is “take-or-pay” and there’s no saying that at the end of the year or the beginning of next Gazprom will not insist Ukraine to buy as much gas as it is obliged to purchase under the contract. Especially since Ukraine plans to raise the transit fees for Russian gas in January, a Ukrainian official told New Europe on October 29.
Gazprom doesn’t cut any slack to European consumers. On the sidelines of an energy conference in Moscow, Gazprom’s deputy chief executive, Alexander Medvedev, last week warned European customers it expects them to buy as much gas as they are obliged to purchase under their “take-or-pay” contracts. The company’s largest European customers owe Gazprom about $2.5 billion due to a breach of contracts. This is because European clients have had to sharply reduce gas consumption because of the economic crisis and other reasons.
If Gazprom demands that Ukraine also pays what it owes Gazprom due to a breach of contract there will be another gas war, the Ukrainian official said, adding that Naftogaz is experiencing financial problems.
So... will there be another gas war? That’s the 64-million-dollar question. It depends on whether troubled Naftogaz can pay its gas bills on a regular basis, how much gas Naftogaz will actually take and how much it is stipulated in the original contract and whether or not the Ukrainian presidential elections in January will dictate to some extent Moscow’s relations with Kiev.
Russia is planning to build the Nord Stream and South Stream pipelines to strengthen its control of the European market and to bypass Ukraine. For its part, the European Union is pushing forward the Nabucco pipeline that aims at securing sources of gas from non-Russian sources. The Ukrainian official said Kiev is not afraid of Nord Stream since it will transport gas supplies from new fields to northern European countries. But it is concerned about South Stream since Russia may divert some of the gas supplies transiting Ukraine to fill the 63-billion-cubic-meter planned pipeline.
Robert Shetler-Jones, chief executive of Group DF that holds Ukrainian gas billionaire Dmitry Firtash’s business assets, including ousted RosUkrEnergo, which is currently in a dispute with Naftogaz over 11 bcm of gas stored in Ukraine, told New Europe that instead of constructing a large number of new routes to Europe, it is in the best interest of the EU, Ukraine and Russia to ensure that Ukraine’s transit infrastructure is secure and operates normally. He called for “freeing up the political issues in Russia and Ukraine and allowing what is by far the best and cheapest from any routes for former Soviet gas to Europe, which is via Ukraine.”
KGeropoulos@NEurope.eu
The Globe and Mail: ENERGY / GAZPROM'S MAN IN HOUSTON
SHAWN McCARTHY
Houston — From Monday's Globe and Mail Published on Monday, Nov. 02, 2009 12:00AM EST Last updated on Monday, Nov. 02, 2009 3:25AM EST
There's not much in John Hattenberger's corner office on the 25th floor of the Bank of America[pic] tower to indicate that he's Gazprom's man in America's oil and gas capital.
The computer terminals outside his glass walls - where Mr. Hattenberger's team began trading natural gas[pic] contracts last month - are staffed by the same type of keen, scrubbed kids that populate trading floors across North America. Inside his office, the only reminder of Russia's state-owned multinational is the ushanka on a shelf, the fur hat much favoured in Moscow but little seen on the muggy streets of the Gulf Coast city.
Mr. Hattenberger is a lean, lanky Minnesotan who has worked in the natural gas business for nearly 32 years, including 18 in Houston. After spending four years building Gazprom's trading operation in London, he now leads a 25-member Houston office team that aims to expand its trading presence in North America and prepare the ground for major imports of Russian liquefied natural gas.
Gazprom is the largest natural gas company in world, and dominates European markets. It is now looking to diversify its customer base through pipeline connections into eastern Asia, and LNG to Asia and North America.
Mr. Hattenberger often has to deal with political questions about Gazprom's reliability. The company and its Kremlin masters have frequently engaged in battles with ex-Soviet states over contracts, and actually shut off supplies to western Europe last winter after claiming Ukraine was stealing gas from the pipeline.
"We get the question a lot," he said. "But we've hired experienced people here. So the Gazprom name sounds Russian but once customers meet us and see we're all Americans with strong U.S. marketing and trading pedigrees, the questions die down pretty quickly."
Dutch News: Gazprom interested in buying Alkmaar's AZ
Monday 02 November 2009
Russian gas giant Gazprom is interested in taking over Alkmaar football club AZ, the Telegraaf reported at the weekend without detailing its sources.
The paper says Gazprom wants to play an increasingly important role in the Dutch gas market and sees AZ as a perfect way to up its profile.
AZ, last year's league champion, is without a main sponsor following the collapse of DSB bank. AZ was owned by DSB's founder Dirk Scheringa. He has invested €100m in the club and its new stadium, the paper says.
Gazprom already sponsors German club Schalke 04 and had earlier been interested in Dutch club Volendam until it was relegated, the Telegraaf said.
Gazprom is one of the main backers of a project to develop a massive underground gas storage centre between Alkmaar and Bergen. That plan is strongly opposed by many locals who fear it will be dangerous.
New sponsors
AZ's director Toon Gerbrands told the Financieele Dagblad on Friday a number of 'major parties' had shown interest in becoming AZ's main sponsor but that the club is looking for someone who will be around for more than one season.
DSB's curators told the paper the sale of the club would be a 'careful process' carried out 'in close consultation with the management'.
Independent experts would be brought in to assess the price of the club, a spokesman told the FD.
© DutchNews.nl
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